FW: AsianBondsOnline Newsletter (25 September 2017)

To read the full report, data and graphs go to
http://asianbondsonline.adb.org/newsletters/abowdh20170925.pdf?src=newslet
ter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 18 - 22 September 2017

On 20 September, the United States Federal Reserve left its key policy
rate unchanged at between 1.00% and 1.25%. In its decision, the Federal
Reserve said that economic activity continued to post gains, including
steady increases in nonfarm payrolls and a low unemployment rate. The
Federal Reserve also said that there have been improvements in household
spending and business fixed investment, and noted that the recent
hurricanes are expected to have an impact on the economy over the
short-term but are unlikely to affect the economy over the medium-term.
The hurricanes are expected to boost inflation in the short-term but the
impact will fade over a longer time horizon. While the Federal Reserve
left its key policy rate target unchanged, it announced that it would
begin the process of balance sheet normalization in October.

* At its monetary policy meeting on 20-21 September, the Bank of
Japan announced that it would continue its "qualitative and quantitative
monetary easing with yield curve control" program. On 21 September, during
its monetary policy meeting, Bangko Sentral ng Pilipinas kept the
overnight reverse repurchase interest rate unchanged at 3.00%. In its
meeting held on 20 and 22 September, Bank Indonesia's Board of Governors
decided to cut the seven day reverse repurchase rate by 25 basis points to
4.25%.

* Hong Kong, China's consumer prices rose 1.9% year-on-year (y-o-y)
in August after rising 2.0% y-o-y in July. The slightly slower increase in
consumer prices was driven by a deceleration in transport price increases.
Malaysia's consumer prices rose a faster-than-expected 3.7% y-o-y in
August, up from 3.2% y-o-y growth in July, largely driven by higher prices
of transportation and food and nonalcoholic beverages.

* Last week, S&P Global downgraded the People's Republic of China's
(PRC) long term foreign currency rating to A+ from AA- with a stable
outlook. In its decision, S&P Global cited the PRC's continued rise in
debt levels as a reason for the downgrade. Following the PRC's downgrade,
S&P Global also reduced Hong Kong, China's credit rating to AA+, citing
its connections with the PRC as the reason for the downgrade.

* Based on preliminary data from the Ministry of Finance, Japan's
exports rose 18.1% y-o-y to JPY6.3 trillion in August and imports
increased 15.2% y-o-y to JPY6.2 trillion. A trade surplus of JPY113.6
billion was recorded in August. In Singapore, non-oil domestic exports
(NODX) surged 17.0% y-o-y in August, lifted by increases in both
electronic and non-electronic NODX. Electronic NODX rose 21.7% y-o-y in
August versus 15.3% y-o-y in July, while non-electronic NODX rose 15.0%
y-o-y versus 4.4% y-o-y in the same period.

* Hong Kong, China reported a balance-of-payments surplus of HKD76.1
billion for the second quarter (Q2) of 2017, up from a surplus of HKD45.3
billion in the prior quarter. In the Philippines, the overall
balance-of-payments position registered a deficit of USD7 million in
August, down from a deficit of USD678 million in July.

* Local currency government bond yields rose for all tenors last
week in the PRC; Hong Kong, China; and the Republic of Korea, and for most
tenors in the Republic of Korea and Singapore. On the other hand, yields
fell for all tenors in Indonesia and for most maturities in Thailand.
Yields were mixed in the Philippines and Viet Nam. The yield spread
between the 2- and 10-year tenors widened for most emerging East Asian
markets except for the Republic of Korea, Singapore, and Thailand.

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