This article first appeared in The Edge Malaysia Weekly on August 19, 2024 - August 25, 2024

Malaysia kicks things off on Monday with the release of July’s external trade numbers, where UOB Global Economics and Markets Research is expecting exports to show stronger growth momentum of 8.5% year on year (y-o-y) from the previous month’s 1.7% y-o-y increase.

However, UOB says imports are likely to grow at a slower 13% pace y-o-y in July compared with June’s growth of 17.8% y-o-y. The country’s trade surplus is expected to amount to RM14.3 billion in July, unchanged from June, the 51st consecutive month of surplus registered since May 2020.

Malaysia will also report its inflation data for July on Thursday. UOB is projecting headline inflation to inch up to 2.1% in July from 2% in June, largely reflecting year-ago low base effects amid steady fuel pump prices during the month.

Closer to home, Singapore Prime Minister Lawrence Wong will deliver his first National Day Rally speech on Aug 18. As hinted during the National Day message on Aug 8, measures to strengthen social safety nets, enhance assistance for lower and middle-income households and provide employment support could be unveiled.

“In our view, some form of appropriately sized unemployment benefits to help retrenched workers tide through the difficult period may be in consideration but this is likely to come hand-in-hand with upskilling initiatives and job matching services to ensure better employment outcomes,” UOB said in its weekly report last Friday.

Singapore is also set to release its overall consumer price index (CPI) and core CPI for July on Friday. UOB sees a modest uptick of 2.5% y-o-y in July’s overall CPI from 2.4% y-o-y in June, while July’s core CPI is expected to come in at 2.9% y-o-y, the same as June.

“In our forecast, we factor in a slightly stronger sequential momentum in categories such as food, non-durable household goods and personal care items to account for the impact of the goods and services tax (GST) as some supermarkets have temporarily absorbed the one percentage point GST increase on certain items up until June 2024,” it said.

There are three major Asia-Pacific central bank policy decisions this week and all three are broadly expected to maintain the status quo, with potential rate cuts likely due only later in the year.

According to a Bloomberg survey, all nine economists polled expect the Bank of Thailand (BOT) to keep its key policy rate unchanged at 2.5% when it meets on Wednesday.

“In line with the Bloomberg survey, we too expect the BOT to keep its policy rate unchanged at 2.5% at this meeting to contain household debts, given its recent relatively sanguine growth and inflation projections. However, if the outlook deteriorates due partly to the recent political uncertainty, the central bank may be biased towards cutting the policy rate by at least 25 basis points (bps) in 4Q2024 to support growth,” said UOB.

Bank Indonesia’s (BI) monetary policy meeting will be held on the same day, where a Bloomberg survey of 16 economists all expect no change in the BI 7-day reverse repo rate at 6.25%, except one analyst who is projecting a 25bps rate cut.

The Bank of Korea (BOK) will announce its policy decision on Thursday. Like Bloomberg’s poll of six economists, UOB is expecting no change to the BOK official bank rate at 3.5%. “We continue to see a total of 50bps reductions this year, including another 25bps cut in November,” it said.

Elsewhere in Asia-Pacific, key data releases include Thailand’s 2Q gross domestic product (GDP) figures on Monday. According to a Bloomberg poll, Thailand’s GDP may inch higher to 2.1% y-o-y in 2Q from 1.5% y-o-y in 1Q.

Over in the developed economies, the US will hold the Jackson Hole Symposium from Thursday to Saturday. The topic of 2024’s symposium is Reassessing the Effectiveness and Transmission of Monetary Policy. In the past, the Jackson Hole Symposium has occasionally been used as a platform to signal major Fed policy changes so the focus will be on Federal Open Market Committee (FOMC) chair Jerome Powell who will speak on the economic outlook at the event on Friday, said UOB.

“Based on a recent batch of resilient economic data against cooling inflation, we believe Powell will use the opportunity to prepare the markets for the start of Fed rate cuts in the September FOMC but will point to a 25bps cut and dispel expectations for anything more aggressive than that. Bank of England Governor Bailey is also scheduled to speak at the Jackson Hole symposium on Aug 24,” it added.

Market focus will shift to its corporate earnings season with 14 S&P 500 companies among 476 US companies reporting this week.

The focus will also be on the August preliminary private sector manufacturing and service purchasing managers index surveys for Japan, the US, the UK, as well as the eurozone and its constituent economies on Thursday.

On the local corporate front, EPB Group Bhd will make its ACE Market debut on Bursa Malaysia on Friday. The food processing and packaging machinery solutions provider is expected to raise RM40.08 million from its initial public offering exercise.

Kuala Lumpur Kepong Bhd (KL:KLK) and Carlsberg Brewery Malaysia Bhd (KL:CARLSBG) will be announcing their quarterly financial results on Monday; Petronas Gas Bhd (KL:PETGAS) and Petronas Dagangan Bhd (KL:PETDAG) on Tuesday; Maxis Bhd (KL:MAXIS) and SD Guthrie Bhd (KL:SDG) on Wednesday; YTL Power International Bhd (KL:YTLPOWR), Sunway Construction Group Bhd (KL:SUNCON) and Sime Darby Property Bhd (KL:SIMEPROP) on Thursday; and MISC Bhd (KL:MISC), Globetronics Technology Bhd (KL:GTRONIC) and Sports Toto Bhd (KL:SPTOTO) on Friday.

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