Public Post QTC: China – no balance sheet recession China has released flow of funds data for 2022. If anything, they show an economy looking even less like one in BS recession, with the corporate finance reaching a record high.
Public Post QTC: Japan – BOJ's JGB holdings falling The BOJ might well formally change its bond buying programme next week. However, even before that, net buying of JGBs has already turned negative, as the scale of redemptions rises.
Public Post QTC: Japan – consumption still weak The BOJ's monthly estimate shows consumption a bit higher in Q2 compared to Q1. But that doesn't change the big picture: consumption is still 4% below the pre-covid peak.
Public Post QTC: Taiwan – core inflation still high The step-change in core inflation in Taiwan during covid has yet to dissipate. And it seems unlikely to do so, if the export cycle accelerates as quickly as some of the leads suggest.
Public Post QTC: China – two PMIs, two different stories As with mfg, S&P's services PMI for China remains much stronger than the official version. This gap is, frankly, confusing, though supports the two-speed/muddle-though view of the cycle.
Public Post QTC: China – PPI deflation still looks cyclical It still isn't clear that PPI deflation is a structural phenomenon. The test will be in the next few months, and whether PPI rises in line with global commodity prices.
Public Post QTC: China – input prices up Input price data for late May show a rise, validating the increase seen in the PMI. A lot of that is copper, but it should still mean less PPI deflation when data are released next week.
Public Post QTC: Korea – underlying inflation under 2% Some of the details of today's CPI release are a little concerning, but overall, inflation is receding, with our measures of trimmed mean now below the BOK's 2% target.
Public Post QTC: China – PSL down again Loosening via Pledged Supplementary Lending was one of the hopes for this year, and is part of the official plan to tackle housing inventories. But net issuance fell in May for the third consecutive month.
Public Post Taiwan – two engines firing The official PMI shows that services strength is persisting. And in May, finally, some of the robust manufacturing growth that's been priced by equities is showing up in the data.
Public Post QTC: China – two-speed PMIs With PMIs in TW and KR improving in May, the gap between the S&P and official mfg PMI is probably export-related. Still, the two PMIs do now give very different messages about the strength of the overall cycle.
Public Post QTC: Japan – labour share still low The rapid rise in the profit share of 2023 hasn't persisted into 2024. But there also hasn't been a decline, so the wage share remains at the lowest since the 1990s bubble.
Public Post QTC: Korea – so-so semi The Asian export cycle feels softer than it should be, with the YoY loss of momentum seen again in Korea's FM data for May. The reason is a faltering of the semi recovery, without other sectors taking over.
Public Post QTC: Korea – semi strength stalls IP data show the sharp recovery in chip production from early 2023 has lost momentum this year. That is significant for the overall economy when the 80% of manufacturing that isn't semi hasn't yet started to grow.
Public Post QTC: China – PMI down, but prices up The fall in the May NBS PMI was surprising, not because activity is robust, but because it isn't typical for the headline to fall when rising input prices in the survey are pointing to a recovery in PPI inflation.
Public Post QTC: Japan – the wrong type of inflation, again CPI inflation in May in Tokyo continued at the 2-ish% run-rate of the last 6M. But at a headline level, the composition is shifting, away from services, back towards goods. That will further dampen real incomes.
