Thread by @Trinhnomics

Good morning🌞Happy Friday! Found out yesterday that China is not coming to rescue this time as the🐉dragon is tired, so to speak. Investment, retail sales, industrial production all missed & slowed & monetary data shows that Nov won't be better

But elsewhere in Asia not better!

https://twitter.com/Trinhnomics/status/1194798639782100993

India, seen as an alternative to China in the next decade, is slowing too w/ IP contracting to -4.3% in September from -1.1 & CPI rising to 4.6% in October from 3.99. Meaning, we still the RBI would still cut but the room to do so is limited by rising food prices (same as China)!

What about Japan? we know Japan not only has a working age problem, it is depopulating (as in shrinking pop & fewer Japanese every year). So growth can't be good if u can't grow outward (Chinese, Europe demand weak). And now rest of Asia not good either.

VAT hike doesn't help🙄

How about S Korea? Not great either even if it avoids a recession as exports contract -14.7% in October & Nov doesn't look better. Imports falling too! CPI is 0% & PPI deflated (like China & Japan)

Pres Moon higher wage policy couldn't come at a worse time as global demand slows

OK, Taiwan is interesting. Got the same issues as South Korea when it comes to semiconductor & tech & also a slowing China. Still, Taiwan growth is accelerating.

Why? Diversifying its investment (huge increase to ASEAN) & also back at home. Taiwan is an outlier of North Asia👏🏻

Let's talk about Southeast Asia. Indonesia is the LARGEST economy in ASEAN (~1trn). This economy is primarily inwardly driven as exports are shrinking, both in level & relative terms as a share of global. Imports shrinking even more so no help there

Trade data today & exps low👇🏻

Thailand - an interesting economy b/c has a rich economy problem as in demographic issues (working age population decline) & also TOO MUCH SAVINGS, as in not enough investment, even though it is a middle income economy.

Growth has been stuck in low gear for a while & CPI low 👇🏻

So no demand help from Thailand. In fact, got so much savings that the Baht is perpetually strong & so the central bank has to cut rates (now at 1.25%) & ease capital outflow restrictions for domestic investors to diversify & relieve baht strength

OK, the Philippines. Let's look

Other than Indonesia, the Philippines should be a bright star of ASEAN. But don't count on the Philippines to lift global growth as it is a very inwardly driven economy as well except services.

After a strong spurt in 2018, credit cycle is down & central bank is helping w/ cuts

Finally, Vietnam. Best growth story in Asia. GDP is accelerating to 7.3%YoY while CPI contained at 2.2%. Retail sales strong & so is IP.

Except Vietnam econ size is small so a good diversification story, but can't lift the world

So Vietnam & Taiwan are the rock stars of Asia🌟

You're welcome 😉. That was a rough tour of the Asian economic landscape. Want to know what's coming today? Of course u do!!!

OK, we got Malaysia GDP at noon, which markets expect to slow to 4.4% in Q3 from 4.9%. Yes, Malaysia not doing that well, not bad either. Just side-way.

Indonesia trade data out today. Watch imports. If it falls further, Bank Indonesia will need to cut more but likely to pause next wk even though CPI eases.

HK final GDP'll come out & likely to confirm bad news. TW & HK have divergent GDP👈🏻 (HK -2.9% & TW +2.9%)

Have a good day!

Let me show some interesting charts & that reflect POLICY. Taiwan may face the same issues as North Asia economies, its policy has helped it avoid the fate of South Korea & Hong Kong.

What does that mean? Well, let's just say that Taiwan has been diversifying 👈🏻HK vs TW growth👇🏻

Many compare South Korea & Taiwan (both tech dependent). Difference is that Korea is vertically integrated (has brand like Samsung Electronics) while TW is open.

TW has been promoting reshoring vs Korea offshoring w/ higher wage costs & taxes & so Taiwan growth higher than SK👇🏻

And Indonesia trade data just came out - and imports contracted by -16.4%YoY in October & that is bad news for domestic demand. Question is whether BI will cut next week & CPI is low & growth weak so case for cut is there

But it has cut already 4Xs & will wait. That's my call🇮🇩

@verified @Twitter : May I have my blue tick please???

I think I add a lot of value to this chatter box call Twitter 🤷🏻‍♀️🤷🏻‍♀️🤷🏻‍♀️😎🤓

@Trinhnomics ☑️ or not poll???

@verified @Twitter Let me rephrase, I do not think, I know!!!

🤓😇

@verified @Twitter Going off on a tangent here but u know this whole verified blue ticky thing reminds me of M&M:

May I have your attention, please?
May I have your attention, please?
Will the real Slim Shady please stand up?
I repeat, will the real Slim Shady please stand up?

🤷🏻‍♀️☑️ har har har

@verified @Twitter Okay, back to economics. As I said, Malaysia growth is trending side-way. Why? Well, no major break-through in policy since the 1MBD scandal so that's bad news b/c Malaysia bottomed out but stay below 5% growth.

Q3 slowed to 4.4% on weaker mining, manu, construction, services.

@verified @Twitter Meaning, BNM decision to not cut (I called for one) means that it'll cut soon. The economy is weak. Yes, not as strong as some argue even with the resumption of Chinese projects will boost growth but still.

CPI is low at 1.1%YoY & nominal rate is 3% so real rate too tight ✂️🕊️🇲🇾