Asia week ahead: Indian rate decision and key data from China, Taiwan, South Korea

ING Global Economics Team ING Economic and Financial Analysis

The Reserve Bank of India is expected to cut rates by 25 bps. Key economic data releases include China’s purchasing managers’ index, Taiwan's inflation, and South Korea's trade, PMI, and inflation.

India: RBI expected to cut rate by 25 bps

We expect the Reserve Bank of India to cut its repo rate by 25bps to 5.25% on Friday. Inflation has been very subdued, driven by lower food prices. Growth momentum, meanwhile, is set to moderate in the coming quarters amid external headwinds. The performance of exports has deteriorated sharply. Indian shipments to the US fell by over 30% in September compared to July after the imposition of 50% tariffs.

Taiwan: Inflation expected to decline

Taiwan releases its November CPI inflation data on Friday. We expect the CPI to moderate to 1.3% year-on-year, down from around 1.5% YoY in October. Inflation has remained below 2% since May. Despite this, we expect the central bank to remain on hold at its last meeting of the year in mid-December amid stronger-than-expected growth.

China: Manufacturing PMI expected to rebound slightly

China’s purchasing managers’ index, out Sunday, will be the highlight of the week. The official November PMI data comes out on Sunday. We expect a modest rebound in the manufacturing PMI to 49.2, up from 49.0 in October. The non-manufacturing PMI has recently been teetering on the edge of contraction territory for the first time since 2022.

South Korea: Exports expected to continue growing, while inflation rises

South Korea releases trade, PMI, and CPI data. Driven by robust semiconductor demand, exports are projected to continue rising in November. Early November data suggest substantial growth in automobile and ship exports as well. The October tariff agreement with the US likely boosted exports, and suggests the manufacturing PMI will move above neutral.

CPI inflation is projected to reach 2.6% YoY in November, mainly due to last year's low base from temporary fuel tax cuts. Gasoline prices rose sharply, largely due to a weaker KRW, while fresh food prices fell amid strong harvests.

Key events in Asia next week

Read the original analysis: Asia week ahead: Indian rate decision and key data from China, Taiwan, South Korea

Author

ING Global Economics Team

ING Economic and Financial Analysis

From Trump to trade, FX to Brexit, ING’s global economists have it covered. Go to ING.com/THINK to stay a step ahead.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold bounces back toward $4,900, looks to FOMC Minutes

Gold is attempting a bounce from the $4,850 level, having touched a one-week low on Tuesday. Signs of progress in US–Iran talks dented demand for the traditional safe-haven bullion, weighing on Gold in early trades. However, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders now seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.