China: China’s June trade expected to edge up, GDP read to hold near 5.0%
China is scheduled to publish the bulk of its key economic indicators for June. Trade data, out Monday, is expected to show a slight uptick in export and import growth on the month. Early signs are that there isn’t much trade frontloading activity during the tariff ceasefire period so far.
On Tuesday, the highlight of China’s monthly data dump is second quarter GDP, which we expect to remain around 5.0% year on year. For June monthly data, the 70-city housing prices release will provide an update on whether steeper downturns in the last two months continued or was just a blip. Another month of sizable price declines could necessitate more real estate stimulus, and markets have speculated there could be a meeting in the week ahead to address this topic. Hard activity data has been somewhat mixed, with retail sales beating expectations, but industrial production and fixed asset investment softening recently. With markets looking for moderation across the board, this trend could continue in June.
Japan: Trade and machinery orders expected to increase
Data on core machinery orders, trade, and consumer price index inflation will dominate Japan’s week. Based on the trade data from early June, we expect exports to rebound in June. We anticipate a divergence in export performance by region. Exports to Asia, excluding China and the EU, are expected to be stronger than exports to China and the US, given the negative impact of tariffs.
Core machinery orders are also expected to increase, albeit slightly. Tech investment remains solid, which may boost order data in May. Lastly, Japanese CPI, out Friday, should show a slight easing of pressures due to the government’s policy of capping energy and food prices. Nevertheless, inflation is likely to remain well above 3%.
South Korea: Positive outlook on labor market
South Korea’s unemployment rate is expected to fall in June, indicating a gradual recovery in domestic activity. We believe that the government-supported job programme will contribute to job creation, while employment in manufacturing and construction is expected to remain weak.
Singapore: GDP growth picking up
Recent Singaporean activity data, including on industrial production and electronics exports, was better than our expectations given the easing in tariffs-related uncertainty. Hence, we have revised our second-quarter growth estimate upward to 3% year on year.
Indonesia: Interest rates on hold
We believe the macro environment remains well-positioned for Bank Indonesia to cut rates to support economic growth. However, ongoing tariff uncertainties will delay rate cuts. Hence, we expect BI’s policy rate to remain unchanged at 5.5%.
Source: ING
