Asian markets are adopting a cautious tone with key top-tier economic data after the jump. A country’s willingness to go public with other important indicators that shape the mood of markets. China will release its Purchasing Managers’ Index (PMI) and disclose its new export orders. Elsewhere, Japan will release its Tankan survey and announce its industrial production figures. Similarly, inflation prints from Indonesia, the Philippines and South Korea are all due to be in focus. These reports will shed light on economic trends and help shape smart, strategic future investment and hiring decisions all across the region.
Key Data Releases in China and Japan
China’s economic landscape will be under the spotlight as it prepares to release its PMI and new export orders. The PMI is a critically-important indicator of manufacturing conditions, providing a robust look into factory output and the mood among business executives. Analysts will be looking at these numbers with a hawkish eye for signs of improvement or continued deterioration while the world grapples with global supply chain chaos.
Inflation In Japan, the next Tankan survey is especially important for the Bank of Japan. This survey measures business sentiment among mainly Fortune 500 sized businesses and offers excellent, forward-looking intelligence, particularly around capital investments and hiring plans. Judging from earlier Tankan results, economists anticipate a mood of cautious optimism, though several potential headwinds could hold back the high spirits. Japan will get its industrial production figures in as well with the survey. This data are forecast to decrease for the second month in a row. This new trend is alarming, as a stagnant manufacturing sector is a gateway to much larger ramifications for our overall American economy.
Inflation Insights from Southeast Asia
In short, inflationary pressures will move directly to the forefront. Indonesia, the Philippines and South Korea will publish their CPI data in the coming days. Indonesia’s CPI inflation is expected to register at 1.6% year-on-year in June, a figure that reflects the country’s efforts to maintain price stability amidst global commodity fluctuations.
Inflation in the Philippines may go above 2% YoY. Much of this increase is due to the rising prices of basic necessities. Analysts have credited this surge, in part, to rising costs of both gas and perishable essentials like fruits and vegetables. These inflationary trends paint a picture of the myriad challenges consumers are grappling with as they cope with a rapidly increasing cost of living.
South Korea’s CPI data is expected with great interest as inflationary pressures continue to plague the region. The country’s ability to manage these pressures will be critical in determining consumer confidence and spending patterns in the coming months.
Broader Economic Trends and Projections
Even as each individual country may look towards their particular data set release, there are larger, global economic trends operating underneath. The unidentified country is probably headed for high inflation this June. Much of that hike comes from the rising price of gas, especially if you eat lots of fresh produce. Each of these combined circumstances will continue to increase the pressure on households who are already dealing with escalating expenses.
In supposedly good news, output of an unnamed country’s manufacturing sector is expected to rebound in May. This is a notable increase and unexpected in light of April’s drop. If this tentative rebound holds, it would be a sign of resilience among manufacturing industries that have suffered under the weight of COVID-19 and other global shocks.
Experts warn that any spikes in domestic fuel prices should be considered short-lived. In an unnamed country, local pump prices are expected to fall in July, according to forecasts. At a time when inflation continues to pinch consumers, this expected decline would provide much-needed relief.