Weekly Outlook 23 December 2019 - 03 January 2020 - United Overseas Bank
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Friday, 20 December 2019
Alvin Liew Lee Sue Ann Peter Chia
Alvin.LiewTS@uobgroup.com Lee.SueAnn@uobgroup.com
Global Economics & Markets Research
Email: GlobalEcoMktResearch@uobgroup.com
URL: www.uob.com.sg/research
Weekly Outlook
23 December 2019 – 03 January 2020
SINGAPORE
November CPI & IP Data For Last Week Of 2019; PM Lee’s New Year Message To Give A Glimpse Of Full Year GDP
The key data at the end of 2019 will be the November CPI on Mon (23 Dec, headline est: 0.6% y/y from 0.4% in Oct, core est: 0.7%
y/y from 0.6% in Oct) and November industrial production (26 Dec, est. -1.6% y/y from +4.0% in Oct).
Singapore markets will be closed on Christmas Day (25 Dec) and New Year’s Day (1 Jan). We welcome the New Year with a
glimpse of the full-year 2019 GDP growth from PM Lee’s New Year message (31 Dec) followed by the URA 4Q 2019 private home
prices (2 Jan) and the December PMI (3 Jan). Singapore’s prelim 4Q 2019 and full year 2019 GDP will be released no later than 14
Jan 2020 but if it is a repeat of 2019, then the data may be released on 2 Jan, one of the first countries to do so (after Vietnam).
KEY ASIA-PACIFIC ECONOMIES
Still On Look Out For US-China Phase 1 Trade Details, Manufacturing Data In Focus During Festive Season
US Treasury Secretary Mnuchin announced on Thursday (19 Dec) that the US-China Phase 1 trade deal will be signed at the start
of January (2020), emphasizing that the deal was completed and just undergoing a technical “scrub”. Markets will continue to look
out for details of the deal as we approach the signing deadline but the consensus is that this is largely a done deal.
The important Asian data/events for the final week of 2019 and the start of 2020 will be:
1) Christmas, New Year & various holidays In Asia - It will be Christmas Day holiday for most of Asia-Pacific on Wednesday
(25 Dec) except China, Taiwan, Thailand, Vietnam and N. Korea while Philippines & Indonesia will be closed on Christmas Eve
& Day (24-25 Dec). New Zealand, Australia, & Hong Kong will be closed on both 25 and 26 Dec. it will be a holiday for N.
Korea on 27 Dec as the country will commemorate Constitution Day while Philippines will celebrate Rizal Day on 30 Dec. Note
that markets in South Korea and Philippines will be closed for a special Bank holiday on New Year ’s Eve (Tuesday, 31 Dec)
while New Year's Day will see all major Asian-Pacific markets closed on Wednesday (1 Jan). New Zealand will enjoy an
extended New Year’s holiday on 2 Jan. Myanmar celebrates Karen New Year day on 26 Dec and Independence Day on 4 Jan.
2) Manufacturing data in focus - Taiwan and South Korea will release their November industrial production data on Monday (23
Dec, est: 0.1% y/y from -2.9% in Oct) and the subsequent Monday (30 Dec, est: 0.4% y/y from -2.5% in Oct) respectively while
the last day of 2019 will end with the release of China’s official manufacturing & non-manufacturing PMI for December (31 Dec,
NY eve). On New Year’s Day, South Korea will report its December exports data (1 Jan). On 2 Jan, we will get the China
Caixin manufacturing PMI (est: 51.5 from 51.8 in Nov), the private sector manufacturing PMI surveys for various Asian
economies & Thailand’s December CPI.
3) Vietnam’s 4Q & full year 2019 GDP on 28 Dec - Vietnam will release its December trade, CPI, industrial production, retail
sales and most importantly 4Q 2019 GDP, all on the same day and the first economy to release 2019 full year GDP.
US AND DEVELOPED ECONOMIES
Trump’s Impeachment Trial Date, Averting Government Shutdown, Evans At AEA & FOMC Minutes
These are the key things to watch for developed economies in the last week of 2019 and the first week of 2020:
1) Setting The Date For Trump’s Impeachment trial in Senate – After the US House of Representatives voted to impeach
President Trump on two articles of impeachment (the charges of abuse of power and obstruction of Congress) on Wednesday
(18 Dec), House Speaker Nancy Pelosi held back from sending the impeachment articles to the Senate, as she wants to see
whether Republicans will agree to a “fair” trial process including Democrats’ demand to call witnesses. Senate Majority Leader
Mitch McConnell said he and Minority Leader Chuck Schumer are at an impasse over impeachment trial procedures, putting a
question mark whether a trial date can be set before Congress goes for Christmas/New Year recess.
2) Averting a US Government shutdown just before Christmas – The US Senate (19 Dec) voted (with bipartisan support) two
spending bills that would provide US$1.4 trillion to fund the Government through September 2020 and avoid partial shutdown
on Saturday (21 Dec). The 2 bills go to President Trump and the White House has indicated Trump will sign the 2 bills into law.
3) Christmas & New Year Holidays In G7 – Christmas Day holiday will be observed in most major developed markets on
Wednesday (25 Dec) except Japan while UK, EU and Canada will be closed for Boxing Day holiday on 26 Dec. New Year's
Day holiday will be observed in all developed economies (1 Jan) while Japan markets receive an extended break as it will also
be closed from 31 Dec 2019 till 3 Jan 2020.
4) There is no monetary policy decision among developed economies during the last week of 2019 and the first week of 2020 and
the calendar for central bankers speaking in public forums is also very sparse during this period. So far, we only have Chicago
Fed Reserve President Charles Evans (non-voter in 2020 FOMC) taking part at a panel discussion on the first day of the
annual meeting of American Economic Association (AEA) at Atlanta (3-5 Jan). Meanwhile, we will get a special Friday release
of the December 2019 FOMC minutes (4 Jan, Saturday 3am SGT) due to the mid-week New Year holiday.
Weekly Outlook
Friday, 20 December 2019
1|P a g erd
5) G7 data calendar – The key US data on Friday (20 Dec) are the November PCE data and the 3 print for US 3Q GDP but will
likely be overshadowed by the impeachment headlines. Towards the end of 2019, we have key US data in the form of
November advanced goods trade balance (30 Dec) and December Conference Board consumer confidence (31 Dec). The key
US data in the first week of 2019 will be the usual weekly jobless claims (2 Jan), the US ISM manufacturing survey for
December (3 Jan, est: 49 from 48.1 in Nov), and the November construction spending (3 Jan). The data docket is relatively
light for Europe but will be rather busy for Japan ahead of the extended New Year break. The key November Japanese data
include housing starts (26 Dec), construction orders (26 Dec), retail sales (27 Dec), industrial production (27 Dec),
unemployment (27 Dec) and vehicle production (30 Dec).
ASIA WEEKLY RECAP
Economy Data/Event UOB’s View/Comment
China China’s 1Y and >5Y At the latest monthly fixing on Fri (20 Dec), China’s Loan Prime Rate (LPR) for both the 1Y as
LPRs were left well as 5Y and above tenures were left unchanged at 4.15% and 4.80%, respectively. Since
unchanged in Dec the reform of the LPR was announced in August, the 1Y LPR has fallen by a total of just
16bps, while the 5Y and above tenure has declined only 5bps. The PBoC is likely to continue
2019
its gradual pace of monetary policy easing into 2020 to insure against growth risks but the
need to expand stimulus has eased along with the stabilization of the US-China relations. For
now, we maintain our forecast for 1Y LPR at 3.80% by mid-2020.
Indonesia BI Kept Benchmark Bank Indonesia (BI) kept its 7-day Reverse Repo Rate stayed unchanged at 5.00% in line with
Rate Unchanged At our expectation in its December monetary policy meeting. BI reiterated that the decision is
2019’s Last Meeting consistent with low inflation expectation and efforts to support the domestic economic growth
amidst the global growth slowdown. We expect BI to keep its accommodative monetary policy
stance into 2020 to support growth recovery. As such, we keep our call for BI to shade its
benchmark rate lower by 25bps to 4.75% in 1Q20.
Full report: Indonesia: BI Kept Benchmark Rate Unchanged At 2019’s Last Meeting
Malaysia 54 Categories Of The Cabinet has agreed to exempt 54 categories of goods, including commodities and farm
Goods Will Be animals, from the approved permit (AP) requirements for transhipment activities at all
Exempted From Malaysian ports. The government hopes this move can facilitate transhipment activities and
boost the competitiveness of the country’s ports. Currently, there are 74 categories of cargoes
Transhipment Permits
that require AP for transhipment activities in Malaysia. The new ruling is expected to
Next Year implemented in early 2020 after the Royal Malaysian Customs Department had finalised a new
list to replace the existing one and be gazetted.
Philippines October Overseas Money sent home by overseas Filipino workers improved at the fastest pace in 12 months by
Cash Remittances 8.0% y/y to USD2.67bn in Oct (Sep: +6.3% y/y). It was driven by the remittance inflows from
Increased At The both land- and sea-based workers. Year-to-date, overseas cash remittances rose 4.6% to
USD24.9bn in Jan-Oct 2019, exceeding the BSP’s full-year forecast of 3.0%. The US
Fastest Pace In A
remained the top country source of cash remittances with a share of 37.6% to total remittances
Year in Jan-Oct 2019, followed by Saudi Arabia, Singapore, and Japan. Strong remittance inflows
are expected to persist towards year-end due to the holiday season, and subsequently
underpin household consumption in 4Q19.
Singapore November NODX NODX continued to decline but was better-than-expected at -5.9% y/y in November 2019. In
Records Smallest addition, electronic exports in value-terms clocked its highest level in 10 months while non-
Decline In 9 Months electronic exports saw its first positive year-on-year growth in nine months. Coupled with the
positive industrial production growth levels in September and October 2019 as well as
improving Purchasing Managers’ Indices seen of late, Singapore’s macroeconomic
fundamentals would likely improve into 2020 as global macroeconomic environment recovers.
Full report: Singapore: November NODX Records Smallest Decline In 9 Months
Thailand Keeping Rates BOT kept its benchmark rate unchanged at its historical low of 1.25%. The next meeting will be
Unchanged As THB on 5th February 2020. Policy-makers cuts GDP forecast to 2.5% (vs 2.8% earlier) in 2019 and
Stabilises 2.8% (vs 3.3%) in 2020, as well as CPI forecast to 0.7% (vs 0.8%) in 2019 and 0.8% (vs 1.0%)
in 2020. We think that Thailand’s monetary policy rate will stay unchanged at 1.25% for the
whole of 2020, and may even be hiked should economic fundamentals improve beyond
expectations.
Full report: Thailand: Keeping Rates Unchanged As THB Stabilises
Vietnam Moody's confirmed Moody’s confirmed the Government of Vietnam's Ba3 local and foreign currency-denominated
Vietnam's ratings at debt ratings, but changed the outlook to negative to reflect “some ongoing risk of payment
Ba3, changes outlook delays on some of the government’s indirect debt obligations, in the absence of more tangible
to negative and significant measures to improve the coordination and transparency around debt
management within the administration”. The rating was placed under review for downgrade on
9 October 2019.
Weekly Outlook
Friday, 20 December 2019
2|P a g eKEY DATA/EVENTS: ASIA & OCEANIA
Date Data/Event Mth Prior Date Data/Event Mth Prior
20 Dec CH 1-Year Loan Prime Rate Dec 4.15% 30 Dec SK Industrial Production SA MoM Nov -1.70%
CH 5-Year Loan Prime Rate Dec 4.80% SK Industrial Production YoY Nov -2.50%
MA CPI YoY Nov 1.10% SK Cyclical Leading Index Change Nov 0.2
TW Export Orders YoY Nov -3.50% TH Exports (YoY=-5.0%) Nov $20500m
HK CPI Composite YoY Nov 3.10% TH Imports (YoY=-9.2%) Nov $18410m
23 Dec SK Exports 20 Days YoY Dec -9.60% TH Trade Balance Nov $2090m
SK Imports 20 Days YoY Dec -11.20% TH BoP Current Account Balance Nov $2905m
Private Sector Credit MoM TH BoP Overall Balance Nov $1088m
AU Nov 0.10%
(YoY=2.5%)
HK Exports YoY Nov -9.20%
TH Customs Exports YoY Nov -4.54%
HK Imports YoY Nov -11.50%
TH Customs Imports YoY Nov -7.57%
HK Trade Balance HKD Nov -30.6b
TH Customs Trade Balance Nov $507m
SK Department Store Sales YoY Nov -3.00%
SI CPI YoY (NSA MoM=-0.4%) Nov 0.40%
31 Dec New Year's Eve
SI CPI Core YoY Nov 0.60%
South Korean markets are closed
TW Industrial Production YoY Nov -2.92% SK
for a Bank holiday
TW Unemployment Rate Nov 3.72% SK Business Survey Manufacturing Jan 71
PH Budget Balance PHP Nov -49.3b SK Business Survey Non-Manufacturing Jan 74
24 Dec Christmas Eve SK CPI YoY (MoM=-0.6%) Dec 0.20%
ID & Indonesia and Philippine markets SK CPI Core YoY Dec 0.60%
PH closed for a holiday
CH Manufacturing PMI Dec 50.2
TW Money Supply M2 Daily Avg YoY Nov 3.79%
CH Non-manufacturing PMI Dec 54.4
25 Dec Merry Christmas!
SI Bank Loans and Advances YoY Nov 2.60%
Malaysia, Singapore, Hong Kong,
India, South Korea, Myanmar, SI Money Supply M2 YoY Nov 4.80%
Indonesia and Philippine markets
HK Money Supply M2 HKD YoY Nov 2.80%
closed for a holiday
TH Mfg Production Index ISIC NSA YoY Nov -8.45% HK Budget Balance HKD Nov -24.1b
01 Jan Happy New Year's Day & A New
TH Capacity Utilization ISIC Nov 62.83 Decade, 2020!
26 Dec Boxing Day holidays in Hong SK Trade Balance Dec $3369m
Kong, New Zealand and Australia
SI Industrial Production SA MoM Nov 3.40% SK Exports YoY Dec -14.30%
SI Industrial Production YoY Nov 4.00% SK Imports YoY Dec -13.00%
27 Dec 02 Jan New Zealand enjoys an extended
SK Consumer Confidence Dec 100.9 New Year holiday
North Korea commemorates the
AU CBA Australia PMI Mfg Dec F 49.4
adoption of the current
NK AU CoreLogic House Px MoM Dec 2.00%
constitution on 27 December
1972. Markit PMI Mfg for India, Vietnam,
Asi
CH Industrial Profits YoY Nov -9.90% Malaysia, Indonesia, South Korea, Dec
a
Philippines, Thailand & Taiwan
TH Foreign Reserves Dec-20 --
CH Caixin China PMI Mfg Dec 51.8
TH Forward Contracts Dec-20 --
TH CPI YoY (NSA MoM=-0.13%) Dec 0.21%
TW Monitoring Indicator Nov 18
TH CPI Core YoY Dec 0.47%
CH BoP Current Account Balance 3Q F $54.9b AU Commodity Index AUD Dec 115.9
28 Dec VN GDP YoY 4Q 7.31% AU Commodity Index SDR YoY Dec -5.00%
VN CPI YoY Dec 3.52% TH Business Sentiment Index Dec 47.4
VN Exports YoY Dec 3.80% SI URA Private Home Prices QoQ 4Q P 1.30%
VN Imports YoY Dec 4.50% PH CPI YoY 2012=100 Dec 1.30%
VN Trade Balance Dec $100m 03 Jan TH Foreign Reserves Dec-31 --
VN Industrial Production YoY Dec 5.40% HK Retail Sales Value YoY Nov -24.30%
VN Retail Sales YTD YoY Dec 11.80% HK Retail Sales Volume YoY Nov -26.20%
SI Purchasing Managers Index Dec 49.8
SI Electronics Sector Index Dec 49.7
Weekly Outlook
Friday, 20 December 2019
3|P a g eKEY DATA/EVENTS: US AND DEVELOPED ECONOMIES
Date Data/Event Mth Prior Date Data/Event Mth Prior
20 Dec US GDP Annualized QoQ 3Q T 2.10% 31 Dec New Year's Eve
US GDP Price Index (core=2.1%) 3Q T 1.80% Japan markets closed for Bank
JN
holiday
EC Consumer Confidence Dec A -7.2
US FHFA House Price Index MoM Oct 0.60%
US Personal Income Nov 0.00%
US S&P CoreLogic CS 20-City MoM SA Oct 0.36%
US Personal Spending (Real=0.1%) Nov 0.30%
US S&P CoreLogic CS 20-City YoY NSA Oct 2.10%
US PCE Deflator YoY (MoM=0.2%) Nov 1.30%
US Conf. Board Consumer Confidence Dec 125.5
PCE Core Deflator YoY
US Nov 1.60% 01 Jan Happy New Year's Day & A New
(MoM=0.1%)
Decade
US U. of Mich. Sentiment Dec F 99.2 All markets closed except in
23 Dec JN All Industry Activity Index MoM Oct 1.50% Middle East
JN Leading Index CI Oct F 91.8 02 Jan Japan markets closed for extended
JN
New Year holiday
JN Coincident Index Oct F 94.8
IT Markit Italy Manufacturing PMI Dec 47.6
US Durable Goods Orders Nov P 0.50%
FR Markit France Manufacturing PMI Dec F 50.3
US Durables Ex Transportation Nov P 0.50% Markit/BME Germany Manufacturing
GE Dec F 43.4
US Cap Goods Orders Nondef Ex Air Nov P 1.10% PMI
CA GDP YoY (MoM=0.1%) Oct 1.60% EC Markit Eurozone Manufacturing PMI Dec F 45.9
US New Home Sales (MoM=-0.7%) Nov 733k UK Markit UK PMI Manufacturing SA Dec F 47.4
Bank of Russia releases quarterly CA MLI Leading Indicator MoM Nov 0.40%
RU
monetary report US Initial Jobless Claims Dec-28 --
24 Dec Christmas Eve
US Continuing Claims Dec-21 --
BOJ Minutes of October Policy
JN CA Markit Canada Manufacturing PMI Dec 51.4
Meeting
JN Supermarket Sales YoY Nov -4.10% US Markit US Manufacturing PMI Dec F 52.5
US Richmond Fed Manufact. Index Dec -1 03 Jan Japan markets closed for extended
JN
New Year holiday
25 Dec Merry Christmas!
US FOMC Meeting Minutes Dec-11 --
All developed economies closed
US Construction Spending MoM Nov -0.80%
for Christmas except Japan
US ISM Manufacturing Dec 48.1
JN PPI Services YoY Nov 2.10%
BOJ Outright Bond Purchase 5~10, US ISM Prices Paid Dec 46.7
JN
10-25 and 25 Years US Wards Total Vehicle Sales Dec 17.09m
26 Dec Boxing Day holidays in Europe Fed's Evans Takes Part in Panel
and Canada. US financial markets Discussion at annual meeting of
are in operation. US
American Economic Association
JN Housing Starts YoY Nov -7.40% (3-5 Jan)
JN Annualized Housing Starts Nov 0.879m UK BRC Shop Price Index YoY Dec -0.50%
JN Construction Orders YoY Nov 6.40% CPI EU Harmonized YoY
FR Dec P 1.20%
(MoM=0.1%)
US MBA Mortgage Applications Dec-20 -5.00% FR CPI YoY (MoM=0.1%) Dec P 1.00%
US Initial Jobless Claims Dec-21 -- GE Unemployment Change (000's) Dec -16.0k
US Continuing Claims Dec-14 -- GE Unemployment Claims Rate SA Dec 5.00%
27 Dec JN Jobless Rate Nov 2.40% EC M3 Money Supply YoY Nov 5.60%
JN Job-To-Applicant Ratio Nov 1.57 UK Markit/CIPS UK Construction PMI Dec 45.3
JN Tokyo CPI YoY Dec 0.80% UK Net Consumer Credit (YoY=6.1%) Nov 1.3b
JN Tokyo CPI Ex-Fresh Food YoY Dec 0.60% UK Mortgage Approvals Nov 64.6k
JN BOJ Summary of Opinions UK M4 Money Supply YoY (MoM=0.0%) Nov 3.60%
JN Retail Sales YoY (MoM=-14.4%) Nov -7.10% CPI EU Harmonized YoY (MoM=-
GE Dec P 1.20%
Dept. Store, Supermarket Sales 0.8%)
JN Nov -8.20%
YoY GE CPI YoY (MoM=-0.8%) Dec P 1.10%
Industrial Production YoY (MoM=-
JN Nov P -7.70%
4.5%)
EC ECB Publishes Economic Bulletin
UK UK Finance Loans for Housing Nov 41219
Retail Sales NSA YoY (MoM=-
GE Nov 0.80%
1.9%)
30 Dec Nationwide House Px NSA YoY
UK Dec 0.80%
(MoM=0.5%)
JN Vehicle Production YoY Oct 2.30%
RU GDP YoY 3Q F 1.70%
US Advance Goods Trade Balance Nov -$66.5b
US Retail Inventories MoM Nov 0.30%
US Wholesale Inventories MoM Nov P 0.10%
US MNI Chicago PMI Dec 46.3
Pending Home Sales MoM
US Nov -1.70%
(YoY=3.9%)
US Dallas Fed Manf. Activity Dec -1.3
Weekly Outlook
Friday, 20 December 2019
4|P a g eDisclaimer This publication is strictly for informational purposes only and shall not be transmitted, disclosed, copied or relied upon by any person for whatever purpose, and is also not intended for distribution to, or use by, any person in any country where such distribution or use would be contrary to its laws or regulations. This publication is not an offer, recommendation, solicitation or advice to buy or sell any investment product/securities/instruments. Nothing in this publication constitutes accounting, legal, regulatory, tax, financial or other advice. Please consult your own professional advisors about the suitability of any investment product/securities/ instruments for your investment objectives, financial situation and particular needs. The information contained in this publication is based on certain assumptions and analysis of publicly available information and reflects prevailing conditions as of the date of the publication. Any opinions, projections and other forward-looking statements regarding future events or performance of, including but not limited to, countries, markets or companies are not necessarily indicative of, and may differ from actual events or results. The views expressed within this publication are solely those of the author’s and are independent of the actual trading positions of United Overseas Bank Limited, its subsidiaries, affiliates, directors, officers and employees (“UOB Group”). Views expressed reflect the author’s judgment as at the date of this publication and are subject to change. UOB Group may have positions or other interests in, and may effect transactions in the securities/instruments mentioned in the publication. UOB Group may have also issued other reports, publications or documents expressing views which are different from those stated in this publication. Although every reasonable care has been taken to ensure the accuracy, completeness and objectivity of the information contained in this publication, UOB Group makes no representation or warranty, whether express or implied, as to its accuracy, completeness and objectivity and accept no responsibility or liability relating to any losses or damages howsoever suffered by any person arising from any reliance on the views expressed or information in this publication. Weekly Outlook Friday, 20 December 2019 5|P a g e
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