To read the full report, data and graphs go to http://asianbondsonline.adb.org/newsletters/abowdh20170731.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx
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News Highlights - Week of 24 - 28 June 2017
The Republic of Korea’s gross domestic product growth
eased to 2.7% year-on-year (y-o-y) in the second quarter (Q2) of 2017 from 2.9%
y-o-y in the previous quarter, based on advance estimates from the Bank of
Korea. The slower growth was driven by a smaller increase in gross fixed
capital formation of 10.0% y-o-y and a decline in exports of 0.1% y-o-y in Q2
2017. On a quarter-on-quarter basis, the Republic of Korea’s economic growth
slowed to 0.6% in Q2 2017 from 1.1% in the previous quarter.
* Industrial
production in the Republic of Korea contracted 0.3% y-o-y in June, following
0.2% y-o-y growth in May, reflecting a 0.4% y-o-y decline in manufacturing
output. In Singapore, monthly manufacturing output increased 13.1% y-o-y in
June, up from 4.4% y-o-y growth in May. All manufacturing clusters recorded
positive y-o-y growth, except for general manufacturing.
* Japan’s
consumer price inflation was unchanged in June compared with the previous month
at 0.4% y-o-y. Food price inflation was steady at 0.8% y-o-y in June, while
core inflation, which excludes fresh food, was also unchanged at 0.4% y-o-y.
Consumer price inflation in Singapore eased to 0.5% y-o-y in June after rising
1.4% y-o-y in May. The easing was mainly a result of lower inflation in housing
maintenance and repair costs due to the disbursement of the Service and
Conservancy Charges rebates. Inflation for the first half of 2017 averaged 0.7%
and is projected to average between 0.5% and 1.5% for the full year.
* Hong Kong,
China’s exports rose 11.1% y-o-y in June, up from 4.0% y-o-y growth in May.
Imports also strengthened, growing 10.4% y-o-y in June compared with 6.6% y-o-y
in the previous month. Hong Kong, China recorded a trade deficit of HKD48.3
billion in June.
* Last week, RAM
Ratings upgraded its global-scale rating for the Republic of Korea to gAA3 (pi)
from aA1 (pi) with a stable outlook.
* Bank Indonesia
released new regulations for the issuance of commercial paper by nonbank
corporate entities. The new regulations, which will come into effect on 4
September, allow corporates to issue commercial paper with a maturity of 1 year
or less, subject to certain requirements.
* On 27 July,
the Indonesian Parliament approved the government’s proposed revision to the
2017 state budget. The revised state budget estimates marginally lower revenue
of IDR1,736.1 trillion and higher
spending of IDR2,1333.3 trillion. As a result, the budget deficit is
projected to reach an equivalent of 2.9% of gross domestic product versus 2.4%
in the original budget.
* Last week,
Hungary issued a CNY1 billion 3-year Panda bond in the People’s Republic of
China at a yield of 4.85%. Shougang Group last week issued a EUR400 million
3-year bond at a yield of 1.393%. The company is wholly owned by the Beijing
municipal government.
* Local currency
government bond yields rose for most tenors in the People’s Republic of China,
Indonesia, Malaysia, the Philippines, and Viet Nam while yields rose for all
tenors in Singapore. On the other hand, yields for most tenors fell in the
Republic of Korea. In Hong Kong, China, and Thailand, yield movements were
mixed. The spread between the 2- and 10-year maturities widened for most
markets except for Indonesia, Thailand, and Viet Nam.
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