G-7 Macro: There’s not much of interest on the G-7 Macro calendar today. The US publishes July house price data, There is also the Conference Board consumer confidence figures, as well as the Richmond and Philly Fed business surveys. Germany publishes the September Ifo index. Like the ZEW survey, this will probably show a decline.

Australia: The RBA will meet today to discuss policy, though there is almost no chance of a cut. More interesting will be how much, if at all, the discussion has shifted from the August meeting, where there was active discussion about the need for a further rate hike. The risk of a hike seems to have greatly diminished, though it still feels like we are way off any easing. We continue to expect rates to stay on hold until 1Q25 at the earliest.

China: The People’s Bank of China (PBOC), China Securities Regulatory Commission (CSRC), and National Financial Regulatory Administration (NFRA) will host a press conference on supporting economic development at 9am today. Combined with previous signals of increasing monetary policy support, we expect them to flag further easing at this press conference, likely in the form of a rate cut and or an RRR cut. This could also be a possible window for policymakers to confirm the long-rumoured cuts to existing mortgage rates, where markets had been speculating cuts as steep as 80bp to existing mortgage rates which could give households some relief.

Given President Xi’s recent call for policymakers to strive to achieve the growth target, we’ve been expecting increased urgency for policy support rollout, and that looks likely to start soon with monetary policy. Given the 50bp cut from the Fed and markets pricing in another 75bp of cuts before year end, the RMB has seen a recovery and should no longer be holding back PBOC easing. We now see room for the PBOC to either implement multiple 10bp rate cuts or a larger rate cut before the end of the year.  

The PBOC also cut its 14 day reverse repo rate by 10bp yesterday from 1.95% to 1.85%, which should not be interpreted as a new rate cut. The 14 day reverse repo facility has been dormant the last few months, and the rate adjustment upon resuming the facility ahead of the Golden Week holiday was just mirroring the 10bp cut to the 7 day reverse repo rate made in July.

Taiwan: Taiwan releases its export orders data today, where we are looking for a further recovery of export orders to around 9% YoY in August. The August trade data had previously shown some encouraging signs with a stronger-than-expected and broader-than-expected recovery of exports, and we will watch to see if this is also reflected in new orders.

As consumer prices already recorded a 2.0% YoY rise in August and are expected to drop further in September, the BoK’s confidence on price stabilization will grow thus the probability of an October rate cut rises. With consumer prices already down to 2.0% y/y in August and expected to fall further in September, the BoK’s confidence in price stabilisation will grow and we believe the probability of an October rate cut will increase.