7 December 8 Key Developments in Asian Local Currency Markets T he monetary board of the Bangko Sentral ng Pilipinas decided to keep its key policy rates steady during its final meeting for the year on December 8. The overnight reverse repurchase rate remained at.7% while the overnight lending and overnight deposit rates are.% and.%, respectively. The decision came amid easing inflation: the prices of basic goods and services rose.% y-o-y in November, down from.7% y-o-y in October. The easing was attributed to easing food supply pressures and nonmonetary policy measures starting to take effect. The Cabinet Office revised the estimated magnitude of the contraction in Japan s economy in the third quarter (Q) of 8 to.% quarter-on-quarter (q-o-q) from a previous estimate of.% q-o-q. The accelerated contraction was primarily driven by the revised decline in private nonresidential investment of.8% q-o-q from a previous estimate of.% q-o-q. The declines in private consumption and public investment also worsened to.% q-o-q and.% q-o-q, respectively, from.% q-o-q and.9% q-o-q. On an annualized basis, Japan s economy contracted.% in Q 8 compared with a preliminary estimate of.% q-o-q. This was a reversal from the robust growth of.% in the second quarter of 8. Consumer prices in the People s Republic of China (PRC) rose.% y-o-y in November after gaining.% y-o-y in October. The slower y-o-y increase was mostly driven by a smaller increase in food, tobacco, and liquor prices, which rose.% y-o-y in November versus.9% y-o-y in October. Producer prices in the PRC followed a similar trend, with prices rising.7% y-o-y in November after climbing.% y-o-y in October. The PRC s export growth slowed to.% y-o-y in November from.% y-o-y in October. The PRC reported a trade surplus of USD.7 billion in November from USD.8 billion in October. The Philippines trade deficit increased to USD. billion in October from USD. billion in October 7. The PRC s industrial production grew.% y-o-y in November after rising.9% y-o-y in October. Malaysia s industrial production growth nearly doubled in October to.% y-o-y from.% y-o-y in September, with all production indices recording growth during the month. Hong Kong, China s industrial production grew.% y-o-y in Q 8 after rising.% q-o-q in the prior quarter. Asia Bond Monitor November 8 read more -Year Selected LCY Government Security Yields Close of December 8 basis point change from Markets Latest Closing Previous Day* Previous Week* -Jan-8* US.89 -... 8. EU. -... -7. Japan. -. -. -. -. PRC.... -9. Hong Kong, China.... 8.9 India 7.. -. -.. Indonesia 8. -9. 8. 79.9 Korea, Rep. of. -... -.7 Malaysia.9... 7. Philippines 7. -..8.8. Singapore. -7.8 -. -..7 Thailand. -....8 Viet Nam.7... -. Selected Government Security Yields Benchmark Yield Curves - Local Currency Government Bonds -versus- Yield Spread Chart Policy Rate versus Charts Credit Default Swap Spreads & Exchange Rate Indexes Selected Debt Security Issuances Selected Asia Data Releases The PRC s fixed asset investment rose.9% y-o-y in the first months of the year after a.7% y-o-y gain in the first months. By sector, the fastest increase came from primary industry, where fixed asset investment grew.% y-o-y, followed by secondary industry, where such investment grew.% y-o-y. Fixed asset investment in tertiary industry grew.% y-o-y in the first months of the year. The 7 December issue of the Weekly Debt Highlights is the last issue for 8. Issuance will resume on January 9. Local yields rose for most tenors in nearly all markets, except for the Republic of Korea and Singapore, while the -year versus -year yield spread also rose for nearly all markets except in the PRC, Philippines and Viet Nam.....
..... Summary Text of News Articles BSP Leaves Key Policy Rates Unchanged The monetary board of the Bangko Sentral ng Pilipinas decided to keep its key policy rates steady during its final meeting for the year on December 8. The overnight reverse repurchase rate remained at.7%, while the overnight lending and overnight deposit rates are.% and.%, respectively. The decision came amid easing inflation: the prices of basic goods and services grew.% year-on-year (y-o-y) in November, down from.7% y-o-y in October. Slowing inflation was attributed to easing food supply pressures and nonmonetary policy measures starting to take effect. Declining international oil prices and the appreciation of the peso against the US dollar also contributed. The central bank sees inflation falling to between.% and.% in 9. The Bangko Sentral ng Pilipinas had previously raised key policy rates five consecutive times this year for a cumulative increase of 7 basis points. Japan s Real GDP Contraction Revised to.% q-o-q and.% Annualized The Cabinet Office revised the estimated magnitude of the contraction in Japan s economy in the third quarter (Q) of 8 to.% quarter-on-quarter (q-o-q) from a previous estimate of.% q-o-q. The accelerated contraction was primarily driven by the larger decline in private nonresidential investment of.8% q-o-q versus a previous estimate of.% q-o-q. The declines in private consumption and public investment also worsened to.% q-o-q and.% q-o-q, respectively, from.% q-o-q and.9% q-o-q. Meanwhile, private residential investment grew at a faster pace of.7% q-o-q versus.% q-o-q. On an annualized basis, Japan s economy contracted.% in Q 8, compared with a preliminary estimate of.% q-o-q. This was a reversal from the robust growth of.% in the second quarter of 8. Consumer and Producer Price Inflation Fall in the PRC in November Consumer prices in the People s Republic of China (PRC) rose.% y-o-y in November after gaining.% y-o-y in October. The slower y-o-y increase was mostly driven by a smaller increases in food, tobacco, and liquor prices, which rose.% y-o-y in November, down from.9% y-o-y in October. Decelerated price increases in the transportation and communication category also contributed to the slowdown, with prices rising.% y-o-y in November versus.% y-o-y in October. Producer prices in the PRC followed a similar trend, with prices rising.7% y-o-y in November after climbing.% y-o-y in October. For the historical trend of the PRC s inflation rate, refer to this link: https:///market-watch/#policy-rate-and-inflation-trends-prc The PRC s Export and Import Growth Slow in November; The Philippines Trade Deficit Surges in October The PRC s export growth slowed to.% y-o-y in November from.% y-o-y in October. The slower y-o-y growth in exports was largely attributed to the frontloading of exports ahead of the implementation of tariffs amid the ongoing trade dispute between the PRC and the United States. Import growth also declined to.% y-o-y in November from.8% y-o-y in October. The PRC reported a trade surplus of USD.7 billion in November versus USD.8 billion in October. The Philippines trade deficit increased to USD. billion in October from USD. billion in October 7. The trade deficit jumped as imports surged.% y-o-y, down slightly from September s.% y-o-y growth. Growth in imports of telecommunication equipment and electrical machinery (.7% y-o-y), industrial machinery and equipment (.% y-o-y), and transport equipment (.% y-o-y) contributed to the growth of imports. Exports increased.% y-o-y in October, up from an.8% y-o-y increase recorded in September. The increase was bolstered by machinery and transport equipment (9.% y-o-y), other manufactured goods (.% y-o-y), and electronic products (.% y-o-y)........
..... Summary Text of News Articles The PRC s Industrial Production Growth Slows in November; Malaysia s Industrial Production Growth Accelerates in October; Hong Kong, China s Industrial Production Growth Slows in Q 8 The PRC s industrial production grew.% y-o-y in November after rising.9% y-o-y in October. All three major industrial sectors experienced a slowdown in y-o-y growth in November. Mining growth slowed to.% y-o-y in November from.8% y-o-y in October, while manufacturing growth slowed to.% y-o-y from.% in the same period. The production and supply of electricity, thermal power, gas, and water grew 9.8% y-o-y in November after rising.% y-o-y in October. Malaysia s industrial production growth rate nearly doubled in October to.% y-o-y from.% y-o-y in September, with all production indices recording growth during the month. Output grown in the manufacturing sector increased to.% y-o-y in October from.8% y-o-y in the previous month, propelled by rising production of transport equipment and other manufactures; electrical and electronics goods; and petroleum, chemicals, rubber, and plastics. The mining sector recovered with growth of.% y-o-y after output declined.% y-o-y in September as both crude oil and natural gas production showed increases. Growth in the electricity sector slowed to.% y-o-y in October from.% y-o-y in September. On a month-on-month basis, industrial production increased.7% in October following a decline of.% in September. Hong Kong, China s industrial production grew.% y-o-y in Q 8 after rising.% y-o-y in the prior quarter. The slower growth rate in Q 8 was due to y-o-y contractions in some sectors. Textiles and wearing apparel contracted.% y-o-y in Q 8 after gaining.9% y-o-y in the second quarter. Paper products, printing and optical products, machinery, and equipment fell.% y-o-y after rising.% y-o-y in the same period. The PRC s Fixed Asset Investment Growth Accelerates in January November The PRC s fixed asset investment rose.9% y-o-y in the first months of the year after gaining.7% y-o-y in the first months. By sector, the fastest increase came from primary industry, where fixed asset investment grew.% y-o-y in January November, followed by secondary industry, where such investment grew.% y-o-y. The tertiary industry s fixed asset investment grew.% y-o-y in the first months of the year....
Selected Government Security Yields -Month Selected LCY Government Security Yields Markets Close of December 8 Latest Closing Previous Day* basis point change from Previous Week* -Jan-8* US..... EU -.88 -.7 -.7 -.7 -. Japan -. -. -. -. -8.8 PRC.... -. Hong Kong, China..... India 8..... Korea, Rep. of.7 -.7 -.8. Malaysia. -. -.. Philippines..9...9 Singapore..... Thailand..... -Year Selected LCY Government Bond Yields Markets Close of December 8 Latest Closing Previous Day* basis point change from Previous Week* -Jan-8* US.89 -.. 8. EU. -... -7. Japan. -. -. -. -. PRC... -9. Hong Kong, China.... 8.9 India 7.. -. -.. Indonesia 8. -9. 8. 8. 79.9 Korea, Rep. of. -... -.7 Malaysia.9.. 7. Philippines 7. -..8. Singapore. -7.8 -. -..7 Thailand. -...8 Viet Nam.7.. -. EU = European Union, LCY =local currency, PRC = People s Republic of China, US = United States. Source: Based on data from Bloomberg, LP.
Benchmark Yield Curves LCY Government Bonds. US. EU. Japan...8.....8 -... 8 8 -. -. 8 8 -Dec-8 7-Dec-8 -Nov-8 -Dec-8 7-Dec-8 -Nov-8 -Dec-8 7-Dec-8 -Nov-8.9 China, People s Rep. of. Hong Kong, China 9. Indonesia. 9. 8.8..9 8. 8... 7. 7..7.8.. 7 8 9.9 8. 9 8 7 -Dec-8 7-Dec-8 -Nov-8 -Dec-8 7-Dec-8 -Nov-8 -Dec-8 7-Dec-8 -Nov-8. Korea, Republic of. Malaysia 8. Philippines.. 7. 7..8. 8 8 -Dec-8 7-Dec-8 -Nov-8... 8 8 -Dec-8 7-Dec-8 -Nov-8.... 9 8 -Dec-8 7-Dec-8 -Nov-8. Singapore. Thailand. Viet Nam.8........ 9 8 7 -Dec-8 7-Dec-8 -Nov-8.8 8 8 8 -Dec-8 7-Dec-8 -Nov-8. 7 8 9 -Dec-8 7-Dec-8 -Nov-8 EU = European Union, LCY = local currency US = United States. Source: Based on data from Bloomberg.
- versus - Year Yield Spread Chart US EU Japan China, People's Rep. of Hong Kong, China -Dec-8 7-Dec-8 -Nov-8 Indonesia Korea, Rep. of Malaysia Philippines Singapore Thailand Viet Nam 7 basis points EU = European Union, US = United States. Source: Based on data from Bloomberg LP.
Policy Rate versus China, People s Rep. of Hong Kong, China Indonesia 7 8 -year Lending Rate.. HKMA Base Rate.7. 7 7-day Reverse Repo Rate.. Jan- Jul- Feb- Sep- Apr-7 Oct-7 May-8 Dec-8 - Jan- Jul- Feb- Sep- Apr-7 Oct-7 May-8 Dec-8 Jan- Jul- Feb- Sep- Apr-7 Oct-7 May-8 Dec-8 The PRC uses the -year lending rate as one of its policy rates. The Hong Kong Monetary Authority maintains a Discount Window Base Rate. Bank Indonesia shifted its policy rate to the 7-day reverse repo rate effective 9 August. Source: Bloomberg, LP. Korea, Republic of Malaysia Philippines 7 7-day Repo Rate c..7 Overnight Policy Rate. Overnight Reverse Repo Rate..7 Jan- Jul- Feb- Sep- Apr-7 Oct-7 May-8 Dec-8. Jan- Jul- Feb- Sep- Apr-7 Oct-7 May-8 Dec-8 - Jan- Jul- Feb- Sep- Apr-7 Oct-7 May-8 Dec-8 The Bank of Korea shifted its policy rate from the overnight repurchase (repo) rate to the 7-day repo rate in March 8. Bank Negara Malaysia uses the overnight policy rate (OPR) as its policy rate. Bangko Sentral uses the Philippine overnight reverse repurchase agreement rate as one of its policy instruments. Thailand 8 Viet Nam -day Repo Rate. Refinancing Rate..9. - - Jan- Jul- Feb- Sep- Apr-7 Oct-7 May-8 Dec-8 Jan- Jul- Feb- Sep- Apr-7 Oct-7 May-8 Dec-8 The Bank of Thailand replaced the -day repurchase rate with the -day repurchase rate in January 7 as its policy rate. The State Bank of Viet Nam uses a benchmark prime lending rate as its policy rate. 7
Mid spread in basis points Credit Default Swap Spreads and Exchange Rate Indexes Credit Default Swap Spreads Senior -Year* China, People's Rep. of Indonesia Korea, Rep. of Japan Malaysia Philippines Thailand Viet Nam * In USD and based on sovereign bonds Jan- Jun- Dec- May- Oct- Apr- Sep- Mar- Aug- Feb-7 Jul-7 Jan-8 Jun-8 Dec-8 Source: Bloomberg Exchange Rate Indexes (vis-à-vis USD, January 7=) China, People's Rep. of Indonesia Korea, Rep. of Malaysia Philippines Thailand Singapore 9 9 Viet Nam 8 8 7 7 Source: AsianBondsOnline calculations based on Bloomberg data. Jan- Jun- Dec- May- Oct- Apr- Sep- Mar- Aug- Feb-7 Jul-7 Jan-8 Jun-8 Dec-8 8
Selected Debt Security Issuances ( December 8) Auction Average Amount Offered Amount Issued Markets Date Type of Security Coupon (%) (LCY billion) (LCY billion) CN -Dec -year Treasur Bond.. 9. 9. -year Treasury Bond.9.9 8. 8. -Dec 9-day Treasury Bill... HK 9-day Exchange Fund Bills.7.8.8 8-day Exchange Fund Bills.89 9. 9. JP -Dec -year Japanese Government Bond.79 7. 79. KR -Dec -year Monetary Stabilization Bonds.8,.,. -year Korea Treasury Bonds.98.8 7. 7. MY -Dec -year Government Investment Issues.78.7.. PH -Dec 9-day Treasury Bills... 8-day Treasury Bills... -day Treasury Bills.9.. -Dec 7-year Treasury Bonds 7.9.7.. SG -Dec 8-day MAS Bills.7.. 8-day MAS Bills.7.7.7 -Dec 8-day MAS Bills.9.. TH -Dec 9-day Bank of Thailand Bills... 8-day Bank of Thailand Bills... -Dec.-year Government Bonds.8.88. 7. VN -Dec -year Treasury Bonds.,9.,9. -year Treasury Bonds.,9.,9. LCY = local currency, MAS = Monetary Authority of Singapore. Sources: Local market sources and Bloomberg, LP. 9
Selected Asia Data Releases (8 December 8) Economy and Variable Release Date Historical Data Recent Trends Japan /9 /7:.% Japan s exports grew 8.% year-on-year (y-o-y) in October, a reversal from Exports /7:.% the.% y-o-y contraction posted in September. y-o-y, % 9/8:.% NOV /8: 8.% Japan /9 /7: 9.% Japan s import grow th accelerated to 9.9% y-o-y in October from 7.% Imports /7: 7.% y-o-y in September. y-o-y, % 9/8: 7.% NOV /8: 9.9% Japan /9 /7: 78. Japan posted a trade deficit of JPY. billion in October follow ing a surplus Trade Balance /7:. of JPY. billion in September. JPY billion 9/8:. NOV /8:. Malaysia /9 /7:.7% Malaysia s consumer price inflation accelerated to.% y-o-y in October from CPI /7:. %.% y-o-y in September. y-o-y, % 9/8:.% NOV /8:.% Thailand /9 /7:.% The Bank of Thailand maintained its benchmark policy rate at.% during its BOT Benchmark Interest Rate /7:.% meeting on November. % /8:.% 9 DEC /8:.% Philippines /9 /7: 8 The Philippines posted a balance-of-payments deficit of USD8 million in Balance of Payments /7: October, an improvement from the deficit of USD,9 million recorded in USD million 9/8:,9 September. NOV /8: 8 Indonesia / /7:.% In its meeting held on November, Bank Indonesia s Board of Governors 7-Day Reverse Repo Rate /7:.% decided to raise the 7-day reverse repo rate by basis points to.%. % /8:.7% DEC /8:.% Japan / /7:.% The Bank of Japan maintained the policy rate at.% at its last monetary BOJ Policy Balance Rate /7:.% policy meeting in November. % /8:.% DEC /8:.% Japan / /7:.% Japan s consumer price inflation slightly rose to.% y-o-y in October from CPI /7:. %.% y-o-y in September. y-o-y, % 9/8:.% NOV /8:.% Singapore / /7:.% Singapore s consumer price inflation w as steady at.7% y-o-y in October. CPI /7:. % y-o-y, % 9/8:.7% NOV /8:.7% Sources: AsianBondsOnline, Bloomberg LP, and Reuters.
News Articles: Sources for Further Reading Tip: Click on link to open a new browser (Acrobat Reader 8); for older versions right-click to open a new browser) BSP Leaves Key Policy Rates Unchanged Monetary Board Holds Policy Settings Steady Bangko Sentral ng PIlipinas ( December 8) Japan s Real GDP Contraction Revised Downward to.% q-o-q and Annualized.% Quarterly Estimates of GDP for July - September 8 (The nd Preliminary) Cabinet Office Japan ( December 8) Consumer and Producer Price Inflation in the PRC Fall in November Consumer Prices for November 8 National Bureau of Statistics of China ( December 8) The PRC s Export and Import Growth Fall in November; Trade Deficit of the Philippines Surges in October; The Republic of Korea s Current Account Surplus Narrows in October China s Trade Surplus With U.S. Hits Record Even as Growth Slows Bloomberg (8 December 8) Highlights of the Philippine Export and Import Statistics: October 8 Philippine Statistics Authority ( December 8) The PRC s Industrial Production Growth Slows in November; Malaysia s Industrial Production Accelerates in October; Hong Kong, China s Industrial Production Slows in Third Quarter National Economy Maintained Stable and Sound Momentum of Development in November National Bureau of Statistics ( December 9) Provisional statistics on index of industrial production and producer price index for the industrial sector for the third quarter of 8 Census and Statistics Department ( December 8) Index of Industrial Production, Malaysia October 8 Department of Statistics Malaysia ( December 8) The PRC Fixed-Asset Investment Grows in First Eleven Months National Economy Maintained Stable and Sound Momentum of Development in November National Bureau of Statistics ( December 9) Disclaimer: AsianBondsOnline Newsletter is available to users free of charge. ADB provides no warranty or undertaking of any kind with respect to the information and materials found on, or linked to, the AsianBondsOnline Newsletter. ADB accepts no responsibility for the accuracy of the material posted or linked to in the publication, or the information contained therein, or for any consequences arising from its use, and does not invite or accept reliance being placed on any material or information so provided. Views expressed in articles marked with AsianBondsOnline are those of the authors and not ADB. This disclaimer does not derogate from, and is in addition to, the general terms and conditions regarding the use of the AsianBondsOnline website, which also apply.