Malaysia reports September trade data Monday. Bank Negara meets Thursday and is expected to keep rates steady at 3.25%. CPI rose only 0.3% y/y in September. While the central bank does not have an explicit inflation target, low price pressures should allow it to keep rates steady well into 2019. September IP will be reported Friday and is expected to remain steady at 2.2% y/y.
China reports Q3 current account data Monday. The surplus is expected to narrow to around 0.7% of GDP this year from 1.3% in 2017, which is a major reason why the US cannot really justify naming China a currency manipulator. October foreign reserves will be reported Wednesday while trade will be reported Thursday. Here too, foreign reserves have been falling this year, making a manipulator label hard to justify. CPI and PPI will be reported Friday.
Indonesia reports Q3 GDP Monday, which is expected to grow 5.18% y/y vs. 5.27% in Q2. The economy continues to grow, but headwinds are building. The government is likely to introduce more fiscal stimulus ahead of the April election. Bank Indonesia next meets November 15. While the bank would like to remain on hold then, much will depend on how the rupiah is trading.
Turkey reports October CPI Monday, which is expected to rise 25.0% y/y vs. 24.52% in September. The inflation target has become irrelevant, as the central bank has acknowledged that the 3-7% target range is likely to remain out of reach for several years. Next policy meeting is December 13. If the lira remains firm then, then rates are likely to be kept on hold.
Czech Republic reports September retail sales Monday, which are expected to rise 0.9% y/y vs. 2.5% in August. It then reports industrial and construction output and trade Tuesday. It reports October CPI Friday, which is expected to remain steady at 2.3% y/y. The central bank just delivered another 25 bp hike to 1.75% last week but suggested it may pause at the next meeting December 20.
Chile reports September retail sales Monday, which are expected to rise 3.0% y/y vs. 4.8% in August. Central bank minutes will be released Tuesday, while October trade will be reported Wednesday. October CPI will be reported Thursday, which is expected to rise 2.9% y/y vs. 3.1% in September. If so, this would be just below the 3% target. The bank just started the tightening cycle with a 25 bp hike to 2.75% in October. The pace is likely to be modest and so we see no move at the next policy meeting December 4.
Philippines reports October CPI Tuesday, which is expected to rise 6.8% y/y vs. 6.7% in September. If so, inflation would move further above the 3-5% target range. Next central bank meeting is November 15 and another 25 bp hike seems likely. The Philippines reports September trade Wednesday. It reports Q3 GDP Thursday, which is expected to grow 6.3% y/y vs. 6.0% in Q2. With growth remaining robust, the central bank should be able to continue its tightening cycle into 2019.
Taiwan reports October CPI Tuesday, which is expected rose 1.72% y/y in September. Trade will be reported Wednesday. While the central bank does not have an explicit inflation target, low price pressures should allow it to remain on hold at its next quarterly policy meeting in December. The slowdown in the mainland economy is likely to weigh on Taiwan.
Brazil COPOM releases its minutes Tuesday. At that meeting, COPOM left rates steady at 6.5%. Next COPOM meeting is December 12. A lot can happen between now and then, but steady rates are likely until early 2019. October IPCA consumer inflation will be reported Wednesday, which is expected to rise 4.66% y/y vs. 4.53% in September.
Russia reports October CPI Wednesday, which is expected to rise 3.6% y/y vs. 3.4% in September. If so, inflation would move closer to the 4% target. Still, the firm ruble should allow the central bank to keep rates steady at the next policy meeting December 14. September trade will be reported Friday. Exports have been strong this year on high oil prices.
Hungary reports September retail sales Wednesday, which are expected rose 6.8% y/y in August. The central bank also releases its minutes that day. Policy was left steady then and is likely to be left steady at the next meeting November 20. September IP and October CPI will be reported Thursday. Inflation is seen remaining steady at 3.6% y/y. September trade will be reported Friday.
National Bank of Poland meets Wednesday and is expected to keep rates steady at 1.5%. CPI rose only 1.7% y/y in October, near the bottom of the 1.5-3.5% target range. The bank’s official forward guidance sees steady rates through the end of 2019, though some unofficial comments suggest a desire for steady rates through 2020. That is too far ahead to predict, quite frankly.
South Africa reports September manufacturing Thursday, which is expected to rise 1.9% y/y vs. 1.3% in August. The economy remains weak, but the SARB may be forced to hike rates at its next policy meeting November 22 if the rand remains under pressure. At the last meeting, three members of the MPC voted to hike rates and so it won’t take much to tilt it into hiking.
Mexico reports October CPI Thursday, which is expected to rise 4.92% y/y vs. 5.02% in September. If so, inflation would remain above the 2-4% target range. Next policy meeting is November 15. If the peso remains under pressure, we think a 25 bp hike to 8% is likely then. September IP will be reported Friday, which is expected to rise 1.8% y/y vs. 0.2% in August.
Peru central bank meets Thursday and is expected to keep rates steady at 2.75%. CPI rose 1.8% y/y in October, just below the center of the 1-3% target range. With growth picking up, the central bank is likely to start the tightening cycle in Q1 2019. Political uncertainty has risen with the arrest of opposition leader Keiko Fujimori on corruption charges.
Check out the EM Preview for the Week Ahead and other musings & insights on Emerging Markets at BBH’s “Mind on the Markets” blog.