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Trinh

@Trinhnomics

Jul 22, 2021 • 21 tweets • 9 min read • Read on X

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Good morning! Here is Asia latest Covid cases. Graph shows net change daily & so far I hate to say this but Southeast Asia is doing rather poorly.

The Philippines is in green & net change is down from peak but still pretty high & there is fear that new Covid surge = new restrictions when it barely recovered from previous lockdowns. More fiscal likely needed. Dominguez says he is willing. Fully vaccinated only 4.4% of pop.

Philippines google mobility is not crashing yet (retail is -19% from pre Covid) but not great. For the Philippines to exit out of the current wave/restriction trap, it needs to up its vaccination rate from 4.4%.

Silver lining playbook? Hopefully the delta variant'll speed it up

Indonesia is in blue (yes, my chart is ugly but u know what speed > beauty; I can make these in like 10 seconds) & cases are going down but from a pretty high level & apparently highest in world? Not good is it. Indo > Phils but only 6% fully vaccinated, behind Asia & world.

Indo retail mobility worse than the Philippines due to restrictions that is extended till 26 July. Jokowi ratings taking a hit. Will Bank Indonesia cut to help? No, IDR already weak. No space.

Thailand is yellow & trend is not its friend. Very bad for a country that needs tourism more than most in Asia. For being more developed than PH & ID, Thailand isn't much better w/ vaccination (yep 5%), something I flagged in Q1 & not much has changed since. So? Needs to change.

Malaysia is also pretty bad & trend is upward. Yikes. But it is better than Asia & world in vaccination rate. Yep! 15%, not bad but defo not enough to open up etc so here we are. Malaysia google mobility for retail sales is the WORST -54% (Thailand -23%)

Vietnam is orangy yellow & trend is bad too. It's doing everything it can to curb it from lockdown in Saigon + Hanoi & giving vaccines to industrial parks + making people build bubble (eg sleep at work) to avoid disruption to supply chain but the virus is raging.

And???

Vietnam has a collapse of mobility (retail sales -53% so bad like Thailand) & thus growth in Q3 is not good. It needs to up its vaccination, which is WORST in Asia, as the ZERO covid strategy is not going to work w/ such an infectious strain.

So? Expect a pickup of vaccination!

Singapore is in aqua blue - kind of like my mood - optimistic! Cases "surging" & got restrictions but also has a path out!!! ENDEMIC VS PANDEMIC. Basically vaccinate 2/3 of the pop in 2 wks & then open up to live w/ the virus like dengue fever. Mobility for retail sales only -10%

https://twitter.com/Trinhnomics/status/1417457828810293251?s=20

Singapore vaccination so far - did I tell you that Singapore is my silver lining playbook for Covid in Asia? If Singapore is able to exit this restriction trap via speedy vaccination, then we're seeing the light at the end of the tunnel. 48% vaccindated!

https://twitter.com/Trinhnomics/status/1417457828810293251?s=20

South Korea got a surge of cases too & restrictions are on; but u know what, its google mobility is not bad at -5% for retail sales so I'm thinking the restrictions aren't that harsh? Anyway, its exports doing great but can't say the same for domestic consumption. Vaccination low

South Korea needs to boost its inoculation rate from 13% currently to exit out of the restriction trap as well. Hopefully it will considering it is very capable of doing so.

Wanna compare Asia vs US vs World? The US vaccination rate is on par w/ Singapore, which is pretty good at 48% as it has a much larger economy/population. Google mobility is pretty good as the economy opens up.

US new covid cases & new deaths (deaths = lagging indicator) - key here is that smudge of higher cases will result in more deaths. If not, then that means that vaccines are effective at allowing us to turn from pandemic into endemic, to borrow the Singaporean phrase.

Ok, so everyone is like wut about Israel? Isn't it a better silver lining playbook than say Singapore? Well, yes, but I wanted to use an Asian example. So Israel managed to vaccinated 61% of its population. And so? Cases still rose BUT DEATHS NOT!

I like that gap below. Me likey. Obvs deaths = lagging so let's wait and see but so far the rise of cases not MASSIVELY SURGING so don't be alarmed. Plus deaths/cases gap wide, which is good.

Hope this thread cheered u up even though trend is pretty bad for Asia, Southeast Asia

Let me end this thread of cases in Asia w/ vaccination rates in Asia by saying the following:

Southeast Asia, esp Vietnam, the Philippines, Indonesia & Thailand at the BOTTOM for vaccination rates & below world.

Needs to do better ASAP. Also where cases are rising. So?

If Israel, US & UK data come out to show that vaccination = reduction of deaths + hospitalization, then we got a situation where those that vaccinated vs not will have divergent performance economically & socially. Because we need to move to ENDEMIC ASAP. End of 2021 please.

Southeast Asia has a lot of catching up to do & it needs to do it like NOW. You are also seeing more headlines of these economies more urgently acquiring jabs etc. And so it's not all negative. Perhaps the delta variant will change the trajectory of vaccination for the positive.

And to loop this back to the US/geopolitics, if it really wants to influence the region, perhaps helping these economies w/ acquiring jabs is a good start. They are rather desperate to get some, as they should be. We are seeing the beginning of the end or a huge divergence.

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More from @Trinhnomics

Trinh

@Trinhnomics

Jul 9

Let's talk about India today. I'll be on @CNBCi at 11am HKT to discuss this particular issue.

First, we all know that India is amongst the least trade exposed and least exposed to the US amongst the big traders.

That being said, the US is the MOST lucrative export market and one it MUST grow if it wants to GROW OUTWARD AND UPWARD through trade.

Why? Look at China PPI today - it's is -3.6%YoY. Look at the Chinese yuan. It is not appreciating like crazy versus the USD. So what? China manufacturing is TOO competitive and will COMPETE with India so exporting to China is not a HIGH MARGIN BUSINESS.

That is the same for everyone who is a big trader. China is a competitor. So fierce that even the Chinese government is struggling w/ this onshore deflated PPI situation so you can see why foreign competitors are pissed off.

First, let's zoom in - India's export as a share of GDP is roughly 2.5% of GDP in 2024. As mentioned, 0.8% is exempted now (pharma, electronics etc). But EXEMPTIONS ARE TEMPORARY. Today, we got threats of 200% tariffs on pharma for example.

Anyway, 1.3% of GDP faces 10% tariff now that will go up to 26% by 1 August if not successfully negotiated down.

India is not too exposed by Trump auto and steel but still somewhat.

Let's look at top 15 exports to the US.

#1 PHARMA, currently exempted but faces sectoral tariffs of a lot.

Look at what India exports to China - ZERO. Zero pharma. 3bn to the EU and 9bn to the US.

So here, you can see that INDIA NEEDS A DEAL.

You can go through all the sectors. Note something. In phones, the EU is a bigger market than the US. Yes 8bn vs US 7bn.

But the EU is not a country but made up of 27 countries. So the US is the LARGEST market by a long shot.

Look at all the ZEROS for China for top items. Not a good market for India.

Read 9 tweets

Trinh

@Trinhnomics

Jul 8

Good morning,

As promised, here is a thread on Trump trade war and what Asian countries are going to do or shall I say who has more room to give Trump a deal than others.

@Trinhnomics interview at 17 mins.

First, let's start with one certainty: Trump tariffs are higher, and they are on sectors (50% steel, 25% alum, 25% auto & more under study), countries (China 20% fentanyl, Canada & Mexico 25% fentanyl w/ USMCA qualified products 0%, and of course 10% reciprocal tariffs on everyone w/ extension ending 1 August for everyone & China 9 August.

Okay, so what?

Okay, let me first discuss the below chart that summarizes the impact on Asia and why different economies will have different negotiating priorities with the Trump administration.

First, big picture. Exports to the US as a share of output (GDP) of respective countries.

Vietnam is the most exposed by a long shot to the US. And that explains why Vietnam was most motivated to climb down from that 46% level to 20% now (40% for transshipment - we discuss later).

Exports to the US was 30% of GDP in 2024. Yep, that high. Good news? more than 10% of GDP was already exempted as Vietnam's largest export was electronics, namely phones, and thus that was exempted.

The rest enjoy 10% until 1 August and then 20% tariff. On a sectoral level, Vietnam faces 50% on steel and 25% on auto but as a share of total, not a big deal, even if not good for those sectors.

Read 15 tweets

Trinh

@Trinhnomics

Jun 27

Good afternoon,

Yes, it has been a while. I have been running around the world & Asia. It was nice seeing so many people and places to share views, but my inner nerdling self fundamentally enjoy sitting at desk listening to music to read and analyze. For those that I got a chance to meet, thank you! People make the world go around - we all yearn to understand our reality & seek to be understood.

Anyway, shall we review first half? And perhaps think about second half 2025, which starts Tuesday next week.

First, we live in a Trump world. By that, we can't escape his decisions, pushing, wanting.

What does he want? That is a question I get a lot. And most people tend to response with this, "He probably doesn't know it himself."

I don't agree. He does. He's clear about it. It's how he gets there and the people that he surrounds himself with to execute it is a big if but not what he wants.

I'll put three things that Trump wants and basically got so far despite everyone calling him TACO (Trump always chickens out).

Three things Trump wants:
a) Tariffs - he likes tariffs. He sees it as a tool to get what he wants, which is to grow US industrial prowess & rebalance US trade. We can disagree on whether this is the right tool or subsidies or industrial policies are better. But tariffs he wants and he gets.

People think TACO is the trade. But tariff is the trade. It's higher. You accept this new normal fine.

I'll give you an example. We got 50% on steel. 25% on aluminum. 25% on auto. +25% fentanyl on Mexico and Canada excluding USMCA products. +20% on China.

And +10% on rest of the world. For China, expires August. For rest of the world, 9th July. Probably gonna get extended.

Read 9 tweets

Trinh

@Trinhnomics

Jun 20

Good morning,

Happy to be back in Hong Kong! The world is on fire, this time, the threat of war widening beyond just Israel and Iran but to the US and that means the gulf.

Meanwhile, Japan sees core inflation rising to 3.7%YoY and this forces the BOJ to hike (it really doesn't want to for many reasons) as it struggles with policy response - note that inflation has been higher than 2% for so long while policy rate is only 0.5%.

So who is most affected by this whole conflict? Well, we all in different ways but the most obvious outcome is oil. Let's take a look.

We Asians IMPORT 69% of oil going through the Straight of Hormuz and the Saudis export the most.

First, let's go through what's happening. Iran has been attacked by Israel and has shown that it is weak. Now that it is weak, it will have to fight back strongly or risk being seen weak.

So it's a question of how it will surrender not whether and when. Will it do that to the US or Israel? It will fight first. Second is the US, will they take this opportunity to wipe out the threat of Iran nuclear power?

If the US is involved, there is a chance of this widening out as US assets in the region will be targets.

Hence the question of the Straight of Hormuz.

20% of global oil consumption flows through the Strait of Hormuz. It is a narrow channel so if that gets choked up, we're looking at a big oil supply shock.

Who's affected? Producers - the gulfs like Saudi, Kawait, UAE.

Who are the importers? Asians, namely China, India, Japan, South Korea. They make up 69% of total imports.

eia.gov/todayinenergy/…

Read 5 tweets

Trinh

@Trinhnomics

Jun 9

Good morning Hong Kong,

Happy to be back in Asia. Paris was great for many reasons - but mostly because the vibe in Europe is much better as people feel more empowered by change that allows people to zoom out from usual distress over political stalemate, even if challenging.

What do I tell clients? Well, the same as I usually do. When you look at data, don't get fixated on a point in a series. Non-farm payroll/jobs data is an example. Markets get so fixated on what the expectations are & whether results are a beat or not. But what we should look at is a trend over time. Revisions happen. Downward revisions or upward. Seasonality happens (strikes/weather/etc). But what does the trend tell you & what does that mean for policy reaction function?

Well, if you zoom out, then what we see is that job gains are SLOWING in the US. And labor market data is lagging.

The ISM, both manufacturing and services, both point to slowing activity.

Meanwhile, we have CPI coming out in May - markets expect 2.5%YoY from 2.3% in April.

So what? What will le Fed do?

Inflation is an interesting figure. Why? Because it mirrors what Trump's doing on tariffs and also the dollar going lower, which means imports cost more now.

Both tell you that US goods inflation should rise over time. But what does that mean for US CPI? Well, most weights for US CPI is housing/services, which are non-tradeable in nature.

So while US CPI is rising, the Fed will want to see if core PCE is rising. Anyway, if employment is softer over time, and inflation is rising, doesn't that constraint the Fed from seeing through the fog and know what to do?

Read 15 tweets

Trinh

@Trinhnomics

May 29

Trump tariffs. Where are the powers coming from? Well, he has a menu of tariff options. It's the only tax that the president can incur without congress.

For Reciprocal Tariffs, he used the International Emergency Economics Power Act (IEEPA), which has an advantage of SPEED and SCOPE but disadvantage in FOUNDATION or legality.

Why? Well, he declared that the TRADE DEFICIT is the national emergency.

The US Court of International Trade said that he MISUSED the IEEPA, as in the foundation of the "emergency" is not right.

Trump team knew this. They know the laws. They decided for SCOPE and SPEED. What happens next?

Well, they appeal. And eventually, it will be the Supreme Court that will decide. But the foundation of his "emergency" was always being questioned.

Irrespective, for markets, there was already a Trump put, and a clear one. He himself sees these "reciprocal tariffs" as maximalist positions anyway.

Remember that he has other powers to choose from. Section 232 has a STRONGER FOUNDATION but takes a while. You need consultation and etc so it takes time.

The +25% steel & aluminum tariffs for example is from Trump 1.0 and he's just removing exemptions + raising alum from 10% to 25%.

Auto tariff is new.

There is a few others that are being "consulted".

Read 4 tweets

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