QTC: Korea – no change in consumer sentiment There's nothing in the June consumer confidence survey to shift the BOK. Confidence was neither strong nor weak. General price expectations ticked down, but picked up for property.
QTC: Taiwan – labour market still tightening Employment in May hitting a record high and unemployment edging down to a 23-year low aren't strong reasons to think the tightening cycle is over.
China – PPI firming further in June 10D prices show YoY PPI is on track to turn positive in June. That might, though, be it: MoM prices have ticked down so far this month, with the YoY rise all about the base effect.
QTC: China – liquidity preference down again Regulatory changes are causing big swings in deposit data, so caution is needed. But looking at M1 in relation to M2 should cancel some of the noise, so the fall in that ratio is concerning.
QTC: Japan – tight labour market, strong capex In today's Q2 BSI survey, overall sentiment didn't change much. But firms continued to report record levels of worker insufficiency, and capex intentions remained strong.
QTC: Korea – exports solid not spectacular The export data for the first 10 days tell the same story as other recent indicators: there is an export recovery, but it is modest, and doesn't look to be gaining further momentum.
QTC: Japan – inflation bites The fall in the EW survey isn't surprising given higher inflation. But it shows the BOJ's dilemma: keep policy loose as aggregate demand is weak, or normalise to try to lift the JPY and real incomes.
QTC: China – consumption share highest since 2005 Consumption isn't as weak as consumer confidence suggests: recently released full-year 2023 data show the consumption share surpassing – albeit only slightly – pre-covid levels.
QTC: China – investment falls, savings don't Recently released FoF data for 2022 confirms no big change in household savings. But investment fell as spending on housing dropped. It should be no surprise the CA surplus has been widening.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.