Paul Cavey

Last week, next week

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China – PPI deflation likely worsened further in June

10-day industrial prices ticked up a bit at the end of June, helped by energy. But building material and ferrous prices continued to drop, and with the higher base from last year, it still seems likely that next Wednesday's data will show headline PPI deflation worsened again in June.

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Taiwan – another hefty rise in fx reserves

At USD5.5bn, June's rise in reserves wasn't as big as May's USD10bn. But it is the first time since 2020 that reserves have grown by over USD5bn for two months running. If lifers/corporates are less willing to recycle the rising trade surplus, the CBC has to step in – or the TWD strengthens more.

Region – themes for 2H

Japan – BOJ officials still leaning positive

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China – still no activity or price momentum

In the Caixin services PMI, like the official version, both data and anecdotes are weak. "Staffing levels were lowered in June...linked to a slowdown in new order growth and concerns over costs", and "intense market competition" led to selling prices being cut at the sharpest pace since April 2022"

Korea – headline CPI ticks up, but should now fade

Japan – issues sharpen for the BOJ

Japan – helpful rebound in consumer confidence

Korea – finally, export perk up

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China – still no rebound

The Caixin PMI rose above 50 in June, but only to 50.4. Comments remained cautious. "Firms were generally cautious with hiring on the back of cost control". A "fourth monthly reduction in average input costs" was shared with clients, "resulting in another decline in average selling prices measures"

Japan – another solid Tankan

Korea – a change, even if it's not fundamental

China – structure of GDP shifting, but slowly

China – still looking like a soft floor

Last week, next week

Japan – cycle review and BOJ scenarios

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Taiwan – consumer confidence and leading indicator down

Consumers aren't sure that inflation is easing, with price expectations remaining strong in June. But with consumer confidence down and other data today showing the monitoring index falling, the CBC won't be thinking inflation is about to bounce back.

China – prices dragging down profits

Japan – Tamura's case for further hikes

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China – two unusual features of the export transition

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Taiwan – tech boosting NIIP, but not the TWD

Data today show Taiwan's NIIP surplus dropped a little in 2023, but remained extremely large. Those assets have been accumulated via strong exports, 60% of which are now "high-technology". And yet, the TWD through April weakened, with one measure of the REER no higher than 2001.

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Korea – defying demographics

My latest video, discussing how Korea is managing to avoid the labour market decline that would usually be expected as the population ages. This is likely to dampen wages – and potentially inflation – in Korea relative to Taiwan, where the part rate isn't rising in the same way.

Japan – more subdued