Public Post QTC: Japan – consumption a bit better The BOJ's consumption index has ticked up so far in Q2. That is welcome, but even now, the index is 2% below the pre-covid level. Consumption remains the weak spot in the economy.
Public Post QTC: Japan – JGB net purchases falling Latest data show that even before the BOJ makes its postponed decision about cutting gross new JGB purchases, on a net basis, the flow of new buying is already falling.
Public Post QTC: China: PPI to 0%, but no more Industrial prices in China have hardly changed since September 2023. So there isn't upstream price deflation...but equally, there are no signs of inflation either.
Public Post QTC: Japan – output gap turns negative The BOJ's latest estimate of the official output gap turning negative in Q1 is puzzling when the Tankan, also produced by the central bank, shows utilisation not just tight, but tightening further.
Public Post QTC: China – muddle through gets more difficult The June drop in the Caixin/S&P services PMI closes the gap with the already-weak official version. This might be noise, but there's a risk that the muddle through of the last few months is running out of road.
Public Post QTC: China – PPI still heading to zero Like high-frequency local data, global commodity prices indicate PPI deflation in China has largely been a cyclical phenomenon, and will end in the next couple of months.
Public Post QTC: China – does FCI explain the PMI The gap between the weak official and strong Caixin manufacturing PMI shown again in the June data is puzzling. But the Caixin version does make some sense given the loosening suggested by an FCI.
Public Post QTC: Taiwan – services even stronger than manufacturing We've been expecting a transition away from domestic services growth to externally led mfg. Instead, both exports and services are picking up. The non-mfg PMI has rarely been higher than it was in June.
Public Post QTC: Korea – semis and nothing else Semiconductor exports are growing strongly, but they only account for one-fifth of total exports. Without other products rising too, there's limited upside for exports overall.
Public Post QTC: China – net exports still boosting GDP This week's May service export data suggests the net export contribution might be a bit lower in Q2 than Q1. But it will still be positive, and so boost headline GDP growth in a way that didn't happen in 2023.
Public Post China – construction PMI drops again The official PMIs for June show China's cycle remains weak, weighed down by construction. There is unlikely to be a recovery until the property cycle stabilises.
Public Post QTC: Korea – underperforming domestically too Export performance is the most obvious driver of Taiwan's outperformance relative to Korea since the pandemic, but the domestic story has been stronger too.
Public Post QTC: Taiwan – cycle momentum doesn't get better than this The official Monitoring Indicator that was updated today through May includes equity prices, but also real economy inputs like IP. It paints a picture of a pretty punchy recovery.
