The Purchasing Managers Index for the manufacturing sector in the People’s Republic of China’s rose to 51.6 in February from 51.3 in January. (A reading above 50 indicates an expansion in the manufacturing sector.) The subindexes for production and new orders both rose dur

To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20170306.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 27 February - 3 March 2017

The Purchasing Managers Index for the manufacturing sector in the People’s Republic of China’s rose to 51.6 in February from 51.3 in January. (A reading above 50 indicates an expansion in the manufacturing sector.) The subindexes for production and new orders both rose during the month. Singapore’s Purchasing Managers Index slightly dipped in February to 50.9 from 51.0 in January, due mainly to a slower rate of expansion in factory output, new orders and new exports, and lower imports.

*     Industrial production in Japan contracted 0.8% month-on-month (m-o-m) in January following an increase of 0.7% m-o-m in December. In the Republic of Korea, industrial production growth eased to 1.7% year-on-year (y-o-y) in January from 4.2% y-o-y in December, led by the slower growth in the manufacturing index. In Viet Nam, industrial production growth climbed to 15.2% y-o-y in February from 0.7% y-o-y in January.

*     The Monetary Policy Committee of Bank Negara Malaysia decided to keep the overnight policy rate at 3.00% during its meeting on 2 March. The central bank’s monetary policy stance remains supportive of Malaysia’s growth momentum, which is expected to be sustained throughout the year.

*     Consumer price inflation in Indonesia climbed to 3.8% y-o-y in February. The uptick was largely due to a faster increase in electricity costs resulting from tariff adjustments. In the Republic of Korea, consumer price inflation eased slightly to 1.9% y-o-y in February, while in Thailand and Viet Nam inflation moderated to 1.4% y-o-y and 5.0% y-o-y, respectively. Meanwhile, consumer prices in Japan marginally rose to 0.4% y-o-y in January.

*     Hong Kong, China’s exports and imports dropped 1.2% y-o-y and 2.7% y-o-y in January. In Malaysia, exports rose 13.6% y-o-y to MYR70.2 billion and imports grew 16.1% y-o-y to MYR65.5 billion in January, resulting in a MYR4.7 billion trade surplus for the month. Thailand’s exports expanded 8.5% y-o-y to USD17.1 billion and imports rose 11.3% y-o-y to USD15.2 billion in January, resulting in a trade surplus of USD1.9 billion for the month. The Republic of Korea’s exports rose 20.2% y-o-y to USD43.2 billion in February, while imports rose 23.3% y-o-y to USD36 billion, posting a trade surplus of USD7.2 billion. In Viet Nam, exports in the first 2 months of the year climbed 15.4% y-o-y to USD27.3 billion and imports rose 19.6% y-o-y to USD27.4 billion. A trade deficit of USD46 million was recorded during the first 2 months of 2017.

*     The Republic of Korea’s current account surplus narrowed to USD5.3 billion in January from USD7.9 billion in December. Thailand’s current account surplus rose to USD5.0 billion in January from USD3.7 billion in December.

*     Local currency debt issuance in the Republic of Korea rose to KRW8,010 billion in January from KRW6,546 billion in December, primarily due to a jump in corporate bond issuance to KRW2,465 billion from KRW380 billion.

*     Local currency government bond yields rose for most tenors in Hong Kong, China, the Philippines, and Thailand; and for all tenors in the Republic of Korea and Malaysia. Yield fell for most tenors in Indonesia while yield movements were mixed in the People’s Republic of China, Singapore, and Viet Nam. Yield spreads between the 2-year and 10-year tenors widened in all markets except in Hong Kong, China, the Philippines, and Viet Nam

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