The upcoming week will be quite busy in Asia, dominated by the usual start-of-the-month economic releases as well as India and Australia’s central bank meetings, writes Prakash Sakpal – Economist, Asia at ING.
Key Quotes:
“The Reserve Bank of Australia and the Reserve Bank of India meet next week. Australia’s exceptionally weak labour report for October made a case for more RBA easing. Adding to the pressure was Governor Philip Lowe’s reluctance for quantitative easing, expressed in his speech earlier this week, which now has markets pricing in more interest rate cuts. However, many (including us) are sceptical we will get a rate cut next week; the implied market probability of a 25 basis point rate cut next week is only 12%.”
“Supporting the stable RBA policy call would be the third-quarter GDP data showing firmer growth. But, the release comes a day after the central bank meeting, which doesn’t make it a timely input for policymakers.”
“Staying ahead in the global easing cycle, India’s central bank looks poised to cut rates again by 25 basis point next week given that growth continues to be on a steady downward path. Governor Shaktikanta Das is determined to ease for as long as it takes. However, aggressive policy stimulus on both monetary and fiscal sides has started stoking inflation, pushing it above the RBI’s 4% comfort level in recent months, which means this could be the last cut of this easing cycle.”
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