Latest news with #RadhikaRao
Business Times
4 days ago
- Business
- Business Times
Tariffs, trade deals and Tokyo wobbles
US inflation might be showing signs of easing but is that just the calm before another storm? Japan's bond market is twitchy, Indonesia has inked a new trade agreement, and there's fresh chatter about what a leadership change at the Fed could mean for the global economy. In this week's Market Focus Weekly from The Business Times, host Emily Liu checks in with Radhika Rao, senior economist at DBS, to walk us through what's really driving the markets across Asia. Why listen? Because US tariffs may finally be hitting wallets We unpack whether sticky inflation is being stirred up by protectionism—and what knock-on effects we're seeing in Asia. Because Indonesia's new trade deal deserves more than a headline Radhika breaks down who stands to gain, what the long-term impact could be, and why this matters for Asean investors. Because Japan's bond market is on edge From yield curve volatility to currency pressure, we explore what's spooking investors—and how much elections might add to the uncertainty. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up And because a change at the US Fed could shake up everything What would a new Fed chair mean for interest rates, the dollar, and Asia's monetary outlook? Market Focus Weekly is your essential catch-up on the signals shaping Asian markets. Listen now at Got feedback or a hot topic in mind? Email us at btpodcasts@ --- Written and hosted by: Emily Liu (emilyliu@ With Radhika Rao, executive director & senior economist, DBS Bank Edited by: Chai Pei Chieh & Claressa Monteiro Produced by: Emily & Chai Pei Chieh A podcast by BT Podcasts, The Business Times, SPH Media --- Follow Market Focus Weekly podcasts every Friday: Channel: Amazon: Apple Podcasts: Spotify: YouTube Music: Website: Do note: This podcast is meant to provide general information only. SPH Media accepts no liability for loss arising from any reliance on the podcast or use of third party's products and services. Please consult professional advisors for independent advice. Discover more BT podcast series: BT Money Hacks at: BT Correspondents: BT Podcasts: BT Branded Podcasts: BT Lens On:
New Straits Times
4 days ago
- Business
- New Straits Times
Asia shares eye best week in months, TSMC surge boosts Taiwan stocks
SINGAPORE/HONG KONG: Emerging Asian stocks extended gains on Friday and were poised for their strongest weekly performance in months, as investors looked beyond US tariff risks to focus on upbeat corporate earnings and dovish central bank tilts. The MSCI gauge of equities in emerging Asia jumped 0.6 per cent. In Southeast Asia, stocks in Indonesia, Singapore, Malaysia, and the Philippines gained up to 1.4 per cent. Thailand's benchmark index rose 1 per cent. It has surged almost 7 per cent for the week and was set for its biggest gain since June 2020, driven by inflows on news that the government would propose to Cabinet a new central bank chief with a dovish bias. Stocks in Taiwan climbed 1.5 per cent to hit their highest since February 27, fuelled by a rally in TSMC, which surged 2 per cent after posting record quarterly profits and lifting its full-year sales forecast. The index has gained more than 2.7 per cent this week, heading for its best performance since mid-May. "The strong overnight performance of TSMC's ADR following the firm's announcement of better-than-expected 2Q25 EPS and 2025 sales guidance, bodes well for the Taiex today," said analysts at KGI Securities. "We expect the Taiex to rise 250-300 points and challenge the intraday high of 23,400." Optimism around Nvidia's H20 shipments further lifted sentiment in Taipei, extending the rally in tech shares. In Indonesia, the benchmark rose for a tenth straight session and touched its highest level since December 13. It was on track for its strongest weekly gain since early March. Investor sentiment was buoyed by Bank Indonesia's rate cut and signals of further easing, following a newly inked trade agreement with Washington — the second such deal in Southeast Asia after Vietnam. "Besides lowering rates, we expect more verbal suasion on banks to lower borrowing costs to provide relief. We have another 25bp cut in our baseline view, taking the rate to 5.0 per cent," said Radhika Rao, senior economist at DBS. In forex markets, most Asian currencies gained modestly against a steady US dollar, but were losing ground over the week. The dollar index was on track for a second straight weekly rise, buoyed by solid economic data and resilient earnings from heavyweights. The Indonesian rupiah was on pace for its weakest weekly performance since April's record low, while the Singapore dollar and Taiwan dollar were both set for second consecutive weekly losses. The Philippine peso slipped 1.1 per cent over the week, while the Thai baht stood out, rising 0.1 per cent. With the earnings season in full swing and signs of policy support building across Asia, investors are finding reasons to stay bullish, even as the uncertainty persists. H
New Straits Times
6 days ago
- Business
- New Straits Times
US trade deal boosts Jakarta stocks, rupiah slips ahead of rate decision
JAKARTA: Indonesian equities climbed to their highest in a month on Wednesday after Jakarta negotiated more favourable trade tariffs with Washington, while the local currency slipped ahead of an interest rate decision by the central bank. The rupiah slipped over 0.1 per cent, while the benchmark Jakarta Composite Index rose as much as 0.8 per cent to its highest lsince mid-June before paring some gains. Shares of Bank Mandiri, one of the country's largest lenders, climbed as much as 1.3 per cent. Washington on Tuesday confirmed it had reached a tariff deal with Indonesia, setting duties at 19 per cent on goods imported from Southeast Asia's biggest economy — well below the previously threatened 32 per cent. It is also lower than the steeper levies proposed for neighbouring countries, including 25 per cent on Malaysia and 36 per cent on Thailand. The news buoyed sentiment ahead of a policy meeting by Bank Indonesia later in the day, though the market remained split on the likely outcome. Bank Indonesia has eased monetary policy twice this year but stood pat at its meeting in June. "It's a close call," said Radhika Rao, senior economist at DBS, who expects the central bank to keep interest rates steady. "The overnight conclusion of the trade deal will be positive for IDR-denominated assets, increasing the possibility that BI (Bank Indonesia) might lean into its dovish bias today." Yet, caution prevails as traders remain all too aware of US President Donald Trump's ever-shifting stance on tariffs. He has often backtracked, altered tariffs rates and timelines, and threatened higher levies since first introducing higher reciprocal tariffs on April 2. Meanwhile, broader emerging Asian currencies were under pressure after the latest US inflation data suggested tariffs were feeding into consumer prices, pushing the dollar to a 15-week high, prompting investors to scale back their monetary easing bets. US Treasury yields climbed to multi-week peaks after the modest rise in June inflation, lifting the dollar index against a bunch of currencies. Eugene Leow, a senior rates strategist with DBS, said market participants were starting to get uncomfortable about the mix of events with US stock indexes and dollar taking note of the jump in yields. The Philippine peso and Thai baht were among the biggest losers, each falling around 0.3 per cent, while the Taiwan dollar also lost ground. In equity markets, Malaysia's Kuala Lumpur index fell 0.3 per cent, Seoul's benchmark declined 0.6 per cent, and Manila stocks dropped 1.6 per cent to its lowest level since late June. Bucking the regional trend, Singapore's Straits Times Index extended its rally, setting a record for the 11th consecutive day, while Taipei's benchmark climbed roughly 1 per cent to reach its highest level since late February.
Business Times
7 days ago
- Business
- Business Times
India's cooling inflation prompts rate cut calls
[MUMBAI] A slump in India's retail inflation to six-year lows and a likely drop to a record low in July is prompting calls for at least one more interest rate cut this year, with many analysts saying the sharp disinflation is also a sign of weakening demand. The drop in June headline inflation is accompanied by low core inflation, which, excluding gold, silver and fuel prices, remains below 4 per cent, suggesting softer underlying consumption which may need more support from monetary policy, analysts say. The Reserve Bank of India cut interest rates by a deeper-than-expected 50 basis points (bps) at its last policy review in June but changed its stance to 'neutral', signalling limited room to cut rates further. After Monday's surprise inflation reading, however, analysts and markets are reflecting the rising possibility of more easing. Swap rates moved lower on Monday and Tuesday (Jul 15), suggesting bets on at least one more rate reduction ahead. Radhika Rao, an economist with DBS Bank, expects another 50 bps of cuts in the current easing cycle. 'Considering the softness in incoming activity indicators (eg production, credit growth, auto sales), and below-projected inflation in the first half of fiscal 2026, the RBI monetary policy committee will be inclined to ease rates further,' Rao said without giving a specific timeframe. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The RBI's next policy review is in early August, though analysts think it will wait for more data and clarity on the global trade war front before likely moving in September or October. Demand weakness is slowly starting to show up in indicators across sectors like autos and real estate. Car sales to dealers fell to a 18-month low in June, data showed on Tuesday. Meanwhile, home sales in India's top seven cities fell 20 per cent in the April-June quarter, real estate consultancy firm Anarock said in a report last month. 'High frequency indicators continue to show moderation in urban consumption and tentative private capex,' said Gaura Sen Gupta, chief economist at IDFC First Bank, who expects one more rate cut from the central bank in October or December. India's central bank expects inflation for the full year to be below 3.7 per cent, governor Sanjay Malhotra told CNBC TV-18 earlier in the day, adding that the monetary policy committee (MPC) will look at the inflation outlook, and not just current data, while deciding on further rate moves. In an interview with the Business Standard following the June policy decision, he had said room may open up if inflation runs lower than its projections. 'With the RBI policy stance being at 'neutral', it is difficult to think of a deep rate cut cycle from here,' said Samiran Chakraborty, economist at Citi. 'But we think the MPC will utilise the space that has opened because of the softer-than-expected CPI prints.' In the April-June quarter, inflation averaged 2.7 per cent, below the RBI's forecast of 2.9 per cent. Citi expects July's inflation rate to fall to a record low of 1.1 per cent and average inflation in the financial year 2025-26 of 3.2 per cent, the lowest since 1990. Urban consumption in India began to slow last year, which economists attribute to weak wage growth and depleted household savings. Rural demand showed a recovery after a strong monsoon last year, but the pick-up has been inconsistent. Sales of two-wheel vehicles, one of the proxies for rural demand, saw a modest 4.7 per cent increase in June but fell 12.5 per cent month-on-month. Private investment has remained sluggish as well. Capacity utilisation has been stuck at around 75–76 per cent for over a year – below the threshold that typically triggers new capital expenditures, economists said. Madhavi Arora, an economist with Emkay Global, said investment is unlikely to pick up immediately amid global trade uncertainties and a murky domestic demand outlook. 'Broadly, the India growth story is stuck at around 6.0 per cent-6.5 per cent kind of range with the story being of missing private economic agents in India,' she added. Government capex has picked up in the first quarter of fiscal 2026. But with the government already having announced tax cuts in the budget, most economists said the ability to provide further stimulus is limited from the fiscal side. 'The space for fiscal policy to further support growth is limited with downside risk to tax collection and nominal GDP growth. Hence, monetary policy will have to continue to do the heavy lifting to support growth,' IDFC's Sen Gupta said. REUTERS
New Straits Times
7 days ago
- Business
- New Straits Times
India's cooling inflation prompts rate cut calls, raises concerns over weakening domestic demand
MUMBAI: A slump in India's retail inflation to six-year lows and a likely drop to a record low in July is prompting calls for at least one more interest rate cut this year, with many analysts saying the sharp disinflation is also a sign of weakening demand. The drop in June headline inflation is accompanied by low core inflation, which, excluding gold, silver and fuel prices, remains below 4 per cent, suggesting softer underlying consumption which may need more support from monetary policy, analysts say. The Reserve Bank of India cut interest rates by a deeper-than-expected 50 basis points (bps) at its last policy review in June but changed its stance to 'neutral', signalling limited room to cut rates further. After Monday's surprise inflation reading, however, analysts and markets are reflecting the rising possibility of more easing. Swap rates moved lower on Monday and Tuesday, suggesting bets on at least one more rate reduction ahead. Radhika Rao, an economist with DBS Bank, expects another 50 bps of cuts in the current easing cycle. "Considering the softness in incoming activity indicators (e.g. production, credit growth, auto sales), and below-projected inflation in the first half of fiscal 2026, the RBI monetary policy committee will be inclined to ease rates further," Rao said without giving a specific timeframe. The RBI's next policy review is in early August, though analysts think it will wait for more data and clarity on the global trade war front before likely moving in September or October. Demand weakness is slowly starting to show up in indicators across sectors like autos and real estate. Car sales to dealers fell to a 18-month low in June, data showed on Tuesday. Meanwhile, home sales in India's top seven cities fell 20% in the April-June quarter, real estate consultancy firm Anarock said in a report last month. "High frequency indicators continue to show moderation in urban consumption and tentative private capex," said Gaura Sen Gupta, chief economist at IDFC First Bank, who expects one more rate cut from the central bank in October or December. RATE HINTS India's central bank expects inflation for the full year to be below 3.7%, Governor Sanjay Malhotra told CNBC TV-18 earlier in the day, adding that the monetary policy committee (MPC) will look at the inflation outlook, and not just current data, while deciding on further rate moves. In an interview with the Business Standard following the June policy decision, he had said room may open up if inflation runs lower than its projections. "With the RBI policy stance being at 'neutral', it is difficult to think of a deep rate cut cycle from here," said Samiran Chakraborty, economist at Citi. "But we think the MPC will utilise the space that has opened because of the softer-than-expected CPI prints." In the April-June quarter, inflation averaged 2.7 per cent, below the RBI's forecast of 2.9 per cent. Citi expects July's inflation rate to fall to a record low of 1.1 per cent and average inflation in the financial year 2025-26 of 3.2 per cent, the lowest since 1990. URBAN DEMAND LAGGING Urban consumption in India began to slow last year, which economists attribute to weak wage growth and depleted household savings. Rural demand showed a recovery after a strong monsoon last year, but the pick-up has been inconsistent. Sales of two-wheel vehicles, one of the proxies for rural demand, saw a modest 4.7 per cent increase in June but fell 12.5 per cent month-on-month. Private investment has remained sluggish as well. Capacity utilisation has been stuck at around 75 — 76 per cent for over a year — below the threshold that typically triggers new capital expenditures, economists said. Madhavi Arora, an economist with Emkay Global, said investment is unlikely to pick up immediately amid global trade uncertainties and a murky domestic demand outlook. "Broadly, the India growth story is stuck at around 6.0 per cent — 6.5 per cent kind of range with the story being of missing private economic agents in India," she added. Government capex has picked up in the first quarter of fiscal 2026. But with the government already having announced tax cuts in the budget, most economists said the ability to provide further stimulus is limited from the fiscal side.
