Thread by @Trinhnomics

Happy Monday! China data dump in 1hr for retail sales, FAI, IP. Eyes will be on FAI & the real estate. IP is expected to edge up. BOJ, Taiwan & Indonesia central bank this wk right before the Fed decision at 2am Thurs. We expect Bank Indonesia to follow the Fed w/ a 25bps cut 👈🏻.

The call for a 25bps cut (more will come later too) for Indonesia is rather simple: fiscal space is very limited as revenue is slowing & expending sticky. The gov' is committed to a prudent stance & that means no space to fund the 40% of GDP infrastructure ambition. Hence, BI ✂️

Ouch. That is a big miss! Yikes!

IP 4.4%YoY vs 4.8% previously & lower than 5.2% expected. Fixed asset investment also disappointed with 5.5% growth from 5.7% & exps of 5.7% (this is closely watched as it means future growth weaker); retail sales also lower at 8.2%

😬#china

But we knew this from the July aggregate financing data & why the PBOC pumped the market w/ RRR cuts (expectations of MLF cuts now rising I'm sure); Details of investment (the future of growth):

Agri -3% (🐷, 🍎)
Mining up! +26.2%
Textile -5%
Ralways -10.7%
Machineries -8%

Private investment slowed to 4.9% ytd while state FLAT at 7.1% (so no bounce from state to help here so more needed); IP:
Agri 0% growth
Food production slowed to 5%
Textile 0.1%
Chemicals 1.2%
Auto manu bounced to 4.3%
General equipment 0%

Yikes! Essentials are DOWN! Got food?

Retail sales slowed too:

Food consumption up! 12.5% (prices are up)
Jewelry -7%
Autos -8.1%
Consumer goods down 7.2% from 7.4%

Basically ESSENTIALS UP & DISCRETIONARY. Same as last month & that is not good news at all as Chinese consumers tightening purse strings.

No 💎💍😬

Notice that the HARD data (real economic data) shows that things are HARDER than SOFT data (service PMIs show a bounce!!!).

This is why it is important to watch HARD data, which mirrors manufacturing PMI.

Tightening purse strings & so don't expect China demand to lift u up!

Real estate investment softened to 10.5%

Indonesia exports FELL -10% in August & imports collapsed by -15.6% from -15.2%. Did u know that current account deficit economies have imports FALLING more than current account surplus economies? That can only mean 1 thing - a strong USD is tightening financial conditions of CAD

Meaning, Indonesia growth is under pressure & despite the whole oil shock to Asia & slightly higher CPI, Bank Indonesia will likely cut by 25bps this week.

This is my call & I am sticking by it!

Buyers WANTED! Import growth in Asia in August (more like lack of one). Indonesia leads the race to REDUCE IMPORT DEMAND. Not good news for heavy exporters:

🇮🇩 Indonesia -15.6% 🥶
🇮🇳 India -13.5%🥶
🇨🇳China -5.6% 🥶
🇰🇷South Korea -4.2% 🥶
🇹🇼Taiwan -2.7% 🥶

🇻🇳Vietnam +7.5% 🤗