Markets across Asia prepared for a pivotal week as upcoming economic data from China, Taiwan, and the Philippines was expected to reveal the consequences of recent US tariff escalations and shifting inflation trends, according to ING's latest analysis.
The spotlight was on China's April trade figures, due Friday, as analysts assessed the fallout from increased tariffs. ING economists anticipated a marked decline in both exports and imports. 'We suspect the shock on Chinese US-bound exports will be significant, causing a double-digit year-on-year decline in both exports and imports,' said ING. With the US accounting for 14-15% of China's exports, the bank noted that many shipments may have 'ground to a halt in April.' While some trade might be diverted to other regions, ING warned, "this isn't a seamless process, and probably won't be sufficient to offset the drag." China is also expected to release foreign reserves data on Wednesday, with investors watching for signs of US Treasury sales.
In Taiwan, attention turned to steady inflation and moderating export growth. April CPI data, expected on Tuesday, was forecast to remain around 2.2% year-on-year. 'As long as we don't see a significant overshoot on prices, it's unlikely to play a significant role in the central bank's rate decision in June,' ING noted, adding that 'no action remains the baseline case.' Taiwan's trade data, due Wednesday, was expected to show slowed exports to the US following two strong months, potentially weighing on overall headline export growth. Nonetheless, ING projected 'positive single-digit growth in April.'
In the Philippines, first-quarter GDP and April inflation data were due. ING expected a rebound in consumer spending to drive economic growth to 5.9% year-on-year. 'This recovery, which follows a cooling of inflation, is supported by interest rate cuts and improved monetary policy transmission that boosted credit growth,' the analysis stated. Although inflation has eased due to falling food and oil prices, ING warned that 'higher electricity prices will offset these gains, resulting in a slight uptick in headline inflation.'
These developments come as markets across the region adjust to the shifting global economic landscape, with trade dynamics and inflation trends playing a central role in shaping monetary policy and growth prospects.
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