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HIGH Malaysia’s schedule of events this week is the announcement of Bank Negara’s Night Policy Rate (OPR).
After making two 25 bps cuts in the interest rate this year, the central bank is ready to further reduce the cost of borrowing in light of the slowdown in the economy.
In its weekly forecast released Thursday, the UOB Global Economic and Markets investigation said it expected a 50bps cut at tomorrow’s meeting.
“We believe Bank Negara will review the effectiveness of the 50bps front-load cut on its OPR in 1Q20 and the RM260bn tax package at this meeting,” he said.
While also forecasting a 50bp cut in May, the CGS-CIMB investigation said in a note on April 23 that it expects Banco Negara to reduce the OPR by an additional 25 points in the second half of the year.
Meanwhile, the Reserve Bank of Australia will also make its monetary decision tomorrow, where Bloomberg hopes to see no change in the interest rate.
IHS Markit will release the April Manufacturing Purchasing Manager Index (PMI) in Malaysia on Friday. The country’s March Industrial Production Index will be announced the same day, where a sharp drop is expected due to the Covid-19 shutdown.
Following a fall in manufacturing PMI to 48.4 in March from 48.5 in the previous month, Malaysian manufacturers are expected to further reduce production in the next 12 months. Manufacturing in the second quarter of this year will be worse than last, both in terms of exports and domestic demand, Ambank chief economist Anthony Dass said in a note on April 14.
“The downside risk is likely to be contained with the deployment of stimulus measures both fiscally and monetarily. That said, until more is known about the likely duration of the pandemic, companies are likely to remain very risk averse, ”he added.
Malaysian trade figures will be released today, and overall trade volume is forecast to decline further. Exports are forecast to fall by more than 3% compared to 1.4% for imports, according to the Bloomberg Economists Survey Average.
First quarter GDP data enters
Hong Kong’s first quarter economic growth figures are slated to be released today. Overall, the city is expected to announce a contraction with the Bloomberg analyst survey estimating -6.7%, compared to -2.9% in the previous quarter.
In Southeast Asia, Indonesia and the Philippines will announce their Q1 GDP results on Tuesday and Thursday.
Made in the United States.
The economic data of the EE. USA They continue to arrive this week, with special attention to the state of the country’s manufacturing sector.
The factory order report for March will be released today, and it is expected to yield weak results considering data released two weeks earlier showed a drop in durable goods orders.
New orders for U.S.-made products were unchanged in February and will remain weak as coronavirus disrupts supply chains amid a manufacturing shutdown. Bloomberg forecasts an 8.7% drop in orders.
Meanwhile, other key US data. USA They include the ISM non-manufacturing index and the trade balance for March tomorrow.
On the corporate scene, some high-profile companies that will post their earnings results will include Walt Disney Company, Activision Blizzard, Electronic Arts, T-Mobile US, Metlife, General Motors, Manulife Financial, Uber Technologies, Motorola Solutions, and Hilton Worldwide.
China’s April services return to growth
China’s service industry is expected to return to expansion in April. For the Caixin services PMI due out Thursday, UOB Global Economics and Markets research predicts a growth reading of 50.7.
Activity in the country’s service sector had recovered in March since February, although it remained at the second lowest level since the survey began in 2015. The index was in contracting territory with a reading of 43.0 in March, despite to increase from 26.5 in the previous month.
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