Consumer price inflation in Malaysia decelerated to 1.1% year-on-year (y-o-y) in July from 1.6% y-o-y in June due to a lower annual price hike in food and nonalcoholic beverages as well as y-o-y

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20160829.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 22 - 26 August 2016

Consumer price inflation in Malaysia decelerated to 1.1% year-on-year (y-o-y) in July from 1.6% y-o-y in June due to a lower annual price hike in food and nonalcoholic beverages as well as y-o-y declines in the price indices for communications, clothing and footwear, and transport. In Singapore, the Consumer Price Index (CPI) fell 0.7% y-o-y in July, the same rate of decline as in June, led by price decreases in housing and utilities as well as in transport. Viet Nam’s CPI inflation rose to 2.6% y-o-y in August from 2.4% y-o-y in July, buoyed by price increases in housing and healthcare.

*     Overall consumer prices in Hong Kong, China, based on the Composite CPI, rose 2.3% y-o-y in July, marginally lower than the 2.4% y-o-y increase in June. The annual uptick in the Composite CPI in July was buoyed by y-o-y price hikes in food, housing, and miscellaneous services.

*     Japan’s CPI fell 0.4% y-o-y in July, the same pace of decline as in June. The annual drop in the CPI in July came from y-o-y price reductions in furniture and household utensils; housing, fuel, light and water; and transportation and communications.

*     Hong Kong, China’s merchandise trade deficit stood at HKD33.3 billion in July, down from HKD45.6 billion in June due to a monthly increase in merchandise exports and a month-on-month (m-o-m) decrease in merchandise imports. Hong Kong, China’s merchandise exports rose 2.7% m-o-m to HKD304.5 billion in July while merchandise imports fell 1.3% m-o-m to HKD337.8 billion in the same month.

*     The Philippines’ merchandise trade deficit widened to USD2.1 billion in June from USD2.0 billion in May as the m-o-m uptick in merchandise exports was lower than that in imported goods. Philippine merchandise exports inched up 0.8% m-o-m to USD4.8 billion in June while imported merchandise items rose 1.7% m-o-m to USD6.9 billion.

*     Manufacturing output in Singapore contracted 3.6% y-o-y in July, a reversal from its 0.6% y-o-y increase in June. Five out of six clusters recorded y-o-y decreases in July: biomedical manufacturing, chemicals, general manufacturing, precision engineering, and transport engineering clusters.

*     Overseas securities held by institutions based in the Republic of Korea totaled USD148.6 billion at the end of June, up 8.8% from the end of March and also larger than the USD111.9 billion in securities held by Korean institutions a year earlier. 

*     The Republic of Korea’s Financial Services Commission announced last week new measures that aim to manage household debt growth. The objectives of these measures are to (i) curb the excess supply in the housing market, (ii) enhance risk management on loans to nonbanking sectors, and (iii) tighten management and monitoring on collective lending.

*     Local currency government bond yields rose for all tenors in Indonesia and for most maturities in the People’s Republic of China (PRC), the Republic of Korea, Malaysia, the Philippines, Singapore, and Thailand last week. Yields fell for most tenors in Viet Nam. Yield movements were mixed in Hong Kong, China. Meanwhile, the yield spread between the 2-year and 10-year tenors widened in the PRC; Hong Kong, China; Indonesia; Malaysia; the Philippines; Singapore; and Thailand; while it narrowed in the Republic of Korea and Viet Nam last week.

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