Investors will be watching to see if the private gauges outperform official ones again, but beyond the headline figures, focus will also be on indicators of orders, employment and input costs. Flash PMIs from elsewhere in Asia showed an uptick in manufacturing in April, but at least part of that was driven by stockpiling due to fears about war-driven supply shortages, and business confidence is dimming as supply chains come under stress.
Another indicator to watch is industrial profit data for March, due on Monday, which will show if earnings remain under pressure from price wars and overcapacity.
Eyes are also on a Politburo scheduled to be held around the final week of April.
Economists at Goldman Sachs think policymakers will maintain a pro-growth stance, focusing on the implementation of planned easing measures.
Although officials will likely express increased concern about the global energy shock and geopolitical uncertainties, they may see little urgency for significant stimulus near-term after solid growth in the first quarter. “Considering higher energy prices and PPI inflation, we see a possibility that policymakers may downplay their pledge for high-profile monetary easing such as policy rate cuts,” Goldman said.
Australia / New Zealand
Australia’s first-quarter inflation data on Wednesday will be the key release, shaping expectations for a possible rate increase by the Reserve Bank of Australia in May.
The RBA has signaled concern about inflation, with the economy already near capacity before the conflict in the Middle East drove up gasoline prices. Wage growth is picking up, and inflation expectations have risen.
A modest upside surprise could be enough for the RBA to deliver a third interest rate increase this year, especially with some economists warning core inflation could rise by 1.0% in the quarter.
The data will also set the backdrop for the federal budget in mid-May, with economists arguing that government spending is adding to inflation pressures.
In New Zealand, RBNZ Governor Anna Breman will speak on Wednesday, likely furthering the central bank’s hawkish narrative on inflation and interest rates. She recently told The Wall Street Journal that she is focused on achieving the inflation target mandated for the central bank, saying, “It must be achieved.”
Still, the RBNZ is aware that unemployment is elevated and that there is a lot of spare capacity in the economy, which may deter interest rate increases for now.
South Korea
South Korea will release April trade data Friday, with exports expected to remain strong on semiconductor demand. Analysts expect the country to post solid annual trade and current-account surpluses this year.
Citigroup expects South Korea’s outbound shipments to grow 46.3% on year for the month, pointing to another record-high chip exports for the first 20 days of April. That follows a revised 49.2% rise recorded in March.
The analysts expect imports to rise 12.9% on year in April, resulting in a $24.8 billion trade surplus after a revised $26.24 billion surplus in March. The country’s annual trade surplus is forecast to reach 10.5% of gross domestic product this year compared with 6.6% of GDP last year, according to Citi estimates.
Thailand
The Bank of Thailand is widely expected to keep its benchmark policy rate at 1.00% on Wednesday, as growth softens and inflationary pressures rise. Thailand is vulnerable to rising energy prices due to its reliance on crude oil imports from the Middle East.
Policymakers are likely to look through the initial rise in oil-driven inflation and take a wait-and-see approach while assessing risks to growth, DBS said. The economy remains below its prepandemic levels of growth, weighed by high household debt and weak consumption.
Tourism, a key growth driver, is also showing signs of slowing. Early April data point to weaker momentum following the Songkran holiday, BoFA Securities economists said.
Taiwan
Taiwan will release its first-quarter advance gross domestic product data on Thursday, likely showing slower but still strong growth. Exports, particularly semiconductors, are expected to support the economy, reflecting Taiwan’s position in high-precision semiconductor production, said ANZ Research’s Raymond Yeung.
For the second quarter, ANZ is closely monitoring the potential effects from the Middle East conflict on gas supplies for energy as well as critical inputs to chip manufacturing, notably helium. ANZ expects Taiwan’s 1Q GDP growth to come in at 11.8% compared to a year ago, slightly lower than 4Q’s 12.65% increase.
Any references to days are in local times.
Write to Jessica Fleetham at jessica.fleetham@wsj.com and Jihye Lee at jihye.lee@wsj.com
(END) Dow Jones Newswires
04-26-26 2014ET