This article first appeared in The Edge Malaysia Weekly on September 2, 2024 - September 8, 2024

Bank Negara Malaysia will be the only Asian central bank with a monetary policy decision this week, which is expected on Sept 5.

According to an Aug 30 Bloomberg poll of three analysts, the central bank is expected to keep its policy rate steady at 3%.

“With lingering inflation upside risks and a brighter domestic growth outlook, we believe that Bank Negara will extend its interest rate pause at 3% when the Monetary Policy Committee meets in the first week of September,” says UOB Global Economic and Market Research in an Aug 30 report.

Meanwhile, the US is set to announce the final implementation plans for the tariff increases on Chinese imports including electric vehicles (EVs), solar panels and semiconductors, the global economic research arm of United Overseas Bank Ltd states in the report.

In May, sitting US President Joe Biden announced import tariffs on a slew of Chinese imports worth US$18 billion, in his administration’s efforts to attract investments into the world’s largest economy.

The tariff rate on certain steel and aluminium products will increase from 0% to 7.5% to 25%, while the rate on semiconductors will increase to 50% by 2025, from 25%. The Biden-Harris administration is also increasing the tariff on EVs to 100% from 25% by this year.

Lithium-ion batteries are also targeted with a higher tariff of 25% from 7.5%, starting with EV batteries this year and non-EV batteries by 2026. The US is also introducing a 25% import tariff on natural graphite and permanent magnets by 2026.

The new tariffs are expected to take effect in September.

Meanwhile, the US and China’s Commerce Ministries will hold a work meeting in Tianjin on Sept 7.

The two sides will engage in in-depth discussions on a wide range of topics, including their respective concerns about economic and trade policies, corporate demands and pragmatic cooperation, the China state-owned news network Xinhua reported on Aug 29.

China International Trade Representative and Vice-Minister of Commerce Wang Shouwen will co-chair the meeting with the US Under Secretary of Commerce for International Trade Marisa Lago.

The Bank of Canada is the only G7 central bank with a monetary policy decision this week, releasing its decision on Sept 4. The bank is expected to reduce its policy rate further by another 25 basis points to 4.25%.

US and Canadian markets will close on Sept 2 as both countries celebrate Labour Day. Despite the shorter week, there is a substantial US economic data docket and Institute of Supply Management surveys, as well as the August jobs report to be looked out for.

“US employment market data for August will be eagerly anticipated at the start of September for clues regarding the interest rate path,” says S&P Global Market Intelligence in a report released on Aug 30.

The data follows Jackson Hole comments from US Federal Reserve chair Jerome Powell that interest rates are expected to be lowered from September if the data come in as expected.

With the Fed’s focus on supporting the job market, any surprises on the downside may spur the market to speculate for a bigger September cut or extended rate reductions in the months to follow, states S&P Global.

Bloomberg estimates that non-farm payroll in the US will increase by 165,000 in August, compared with 114,000 in July, with the unemployment rate easing to 4.2% from 4.3%. The data will be released on Sept 6.

A slew of Asian countries are scheduled to release their August Consumer Price Index data this week, starting with Indonesia on Sept 2, followed by South Korea on Sept 3, the Philippines and Thailand on Sept 5 and Taiwan on Sept 6.

This weekend, China is going to release its official manufacturing and non-manufacturing August Purchasing Managers’ Index (PMI).

The July manufacturing PMI stood at 49.4, while the non-manufacturing PMI was 50.2.

On Bursa Malaysia, Steel Hawk Bhd (KL:SKHAWK) will be transfering its listing from the LEAP Market to the ACE Market on Thursday, making it the first company to do so under the LEAP Market Transfer Framework.

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