Paul Cavey

Japan – May EW survey

Despite all the headwinds, the outlook for the economy looks quite solid, with RGDP likely to be growing 2-3% YoY in the next few months.

Taiwan – May exports

The USD level of exports remained elevated in May, but it is increasingly likely that shipments will be falling in the next 6M.

Taiwan – May CPI

The China Diviner

No, it isn't only Hu Xijin who cares about growth. The government does too, albeit these days more because of the debt burden and politics than employment. But policy stimulus is underwhelming, seemingly because of a logjam in thinking: how to get more investment growth, but no more debt.

China – where we're at

There's been more policy loosening, but it remains incremental. Upside risks to activity do exist as FCI continues to lift, but it is difficult as yet to get too excited about the outlook.

Japan – Q1 profits

Profits declined in Q1 as input prices rose. Non-manufacturing margins, however, remain fairly high, and overall capex growth in Q1 was stable at 3% YoY.

Korea – May CPI

The BOK was right to be hawkish at its last meeting. There was a broad-based acceleration in inflation in May to the highest rate since mid-2008.

Korea – May exports

Taiwan – May PMI

The PMI suggests Taiwan is experiencing a usual down cycle in manufacturing. The caveats to this conclusion are that the recent slowdown has been worsened by the covid disruption in China and continuing supply shortages.

Japan – May consumer confidence

Consumer sentiment remains very weak. However, a turn up is starting to take shape, and that could gain real momentum if the April-May moderation in inflation expectations continues, and a further relaxation of covid restrictions encourages a more vigorous recovery in services activity.

Japan – April labour market

The labour market data in April were positive, albeit more in the sense that the labour market is growing rather than necessarily tightening. That's good for aggregate earnings, but means a rise in individual pay might still be some way away.

China – May NBS PMI

The May PMIs are backward-looking; clearly the bigger story right now is the easing of covid lockdowns. But today's surveys are still useful, suggesting there are some important headwinds to how fast a recovery there can be from here.

China – May small business survey

China – where we're at

The China Diviner

Reading the western media, and it seems the strongest market in China right now is for doom and gloom. Which is striking, as the short-term cycle is likely close to a trough, while there are reasons to think the longer-term outlook isn't as bad as the spate of the-end-is-nigh headlines suggests.

Taiwan – April monitoring index

Japan - May Tokyo CPI

Japan – April services PPI

Korea – May BOK meeting

The BOK was hawkish today. It raised rates; revised up its forecasts for inflation; and added to its statement a new phrase that the “Board sees it as warranted to conduct monetary policy with more emphasis on inflation for some time”.

Korea – May business sentiment

At the margin, today's business sentiment data likely tilt the BOK to remain more hawkish for a bit longer. Korea isn't facing stagflation. Rather, as has been the case recently, growth is strong and inflation rising inflation. Given that backdrop, there's likely more tightening ahead.

Korea – Q1 consumer credit

Korea – May consumer confidence

The strength of buying intentions and especially price expectations in this month's consumer confidence survey will keep the BOK hawkish at its Thursday meeting.

Japan – April trimmed mean CPI

Korea – May 20-day exports

China – where we're at

The Covid-19 situation has improved, but not by enough to declare the all-clear. Policy has eased, but not by enough to ensure recovery when lockdowns do end. There's more debate about giving help to households, but further loosening still seems likely to focus on companies and investment.