FW: AsianBondsOnline Newsletter (18 September 2017)

To read the full report, data and graphs go to
http://asianbondsonline.adb.org/newsletters/abowdh20170918.pdf?src=newslet
ter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 11 - 15 September 2017

An improving global outlook pushed up government bond yields in major
advanced economies between 1 June and 15 August. Bond yields in most
emerging East Asian markets also rose during the review period, according
to the latest Asia Bond Monitor. Emerging East Asia's local currency bond
market continued to expand in the second quarter of 2017, with the
region's LCY bonds outstanding climbing to nearly USD11.0 trillion at the
end of June. With economic prospects generally benign, financial risks are
receding in emerging East Asia, but downside risks loom over a longer time
horizon, including the normalization of the United States' Federal
Reserve's balance sheet. A copy of the full report is available at
https://asianbondsonline.adb.org/documents/abm_sep_2017.pdf

* Consumer prices in the People's Republic of China (PRC) rose 1.8%
year-on-year (y-o-y) in August after gaining 1.4% y-o-y in July. While
most items in the consumer price basket showed gains, the largest increase
was recorded in food, liquor, and tobacco prices, which rose 0.4% y-o-y
after falling 0.1% y-o-y in July. Producer prices also jumped 6.3% y-o-y
in August following a 5.5% y-o-y increase in the previous month.

* Industrial production growth in the PRC slowed to 6.0% y-o-y in
August from 6.4% y-o-y in July. The largest gains in August came from the
production of electricity, heat, gas, and water, which rose 8.7% y-o-y.
Malaysia's Index of Industrial Production saw substantial growth of 6.1%
y-o-y in July, up from 4.0% y-o-y in June, lifted largely by sharp
increases in manufacturing and electricity outputs. Hong Kong, China's
industrial production rose 0.4% y-o-y in the second quarter of 2017 after
rising 0.2% y-o-y in the previous quarter.

* Exports from Indonesia climbed 19.2% y-o-y in August to USD15.2
billion, while imports rose 8.9% y-o-y to USD13.5 billion. A trade surplus
valued at USD1.7 billion was recorded in August. Exports from the
Philippines rebounded in July with double-digit growth of 10.4% y-o-y to
reach USD5.3 billion; imports declined further in July, falling 3.2% y-o-y
to USD6.9 billion. The Philippines posted a trade deficit of USD1.6
billion in July.

* For the first time in 2017, the Republic of Korea's local currency
bond market experienced net foreign capital outflows amid increased
geopolitical risks. Foreign investors sold a net KRW2,167 billion of
listed bonds in August, a reversal from the strong net inflows of KRW2,755
billion in July.

* Personal remittances from overseas Filipino workers climbed 8.7%
y-o-y in July, amounting to USD2.6 billion. Cumulative personal
remittances for January-July reached USD17.9 billion, 5.9% higher than the
amount in the same period last year.

* The People's Bank of China last week removed the reserve
requirement on financial institutions' positions in renminbi forward
exchange contracts. Prior to this, the reserve requirement in the PRC was
set at 20%.

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

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