IPI, manufacturing data

The Industrial Production Index (IPI) for April 2022 will be released on June 10 along with the monthly manufacturing statistics.

Bloomberg estimates growth of 5.4% year-on-year (YOY) in April, compared to 5.1% in March.

According to Trading Economics global macro models and analysts’ expectations, Malaysia’s IPI is expected to reach 3.5% by the end of this quarter.

Meanwhile, Top Glove Corp Bhd is expected to release its third-quarter financial results for the period ended May 31 on Thursday.

Bank Negara will announce its international reserves as of May 31 on Wednesday.

Bank Negara’s international reserves stood at US$111.4 billion (RM489.16 billion) as of May 13.

In addition, Bursa Malaysia and its subsidiaries will be closed today.

This is in conjunction with the official birthday of the Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah.

Inflation in China

The CHINA inflation figures, the Producer Price Index (PPI) and the Caixin Services Purchasing Managers Index or PMI will be in focus.

S&P Global said any upside surprises to its inflation could put further pressure on the market, especially with consensus already pointing to a month-on-month jump for the headline CPI.

Bloomberg expects inflation to rise to 2.2% year-on-year in May from 2.1% in April, while the PPI is moderating to 6.5% year-on-year from 8% in April.

Central bank meetings

The Reserve Bank of Australia (RBA), the Reserve Bank of India (RBI) and the Bank of Thailand (BoT) will update their monetary policy with a tightening of key rates not ruled out.

RBARBA

According to a Bloomberg poll, the central bank is widely expected to raise the RBA’s cash target rate.

However, there is a wide range of forecasts, ranging from three analysts expecting a 25 basis point (bp) rise to 0.6%, to two expecting a 40bp rise to 0.75% , with only one analyst expecting a 50bp rise to 0.85%.

UOB Global Economics & Markets Research agrees that a 40 basis point hike at this meeting would be a close call, but that’s not its base case.

He sees the RBA increase by 25 basis points to 0.6% in June, and for now, another 65 basis points by the end of 2022, which would bring the official exchange rate (OCR) to 1.25% by the end of the year.

Further, UOB expects OCR to increase in 2023 and 2024, reaching 2.5% by the end of its forecast period.

In a Bloomberg survey of 10 analysts, six expect the RBI repo rate to rise 50 basis points to 4.9% at this meeting and two expect 40 basis points, the other two expecting a 25 basis point hike.

The UOB expects the BoT to inject a 25 basis point rate hike this year, but only as early as the third quarter, in response to higher inflation risks and the faster-than-expected rise in the Federal Open Market Committee for the coming year.