Asia: A new wave of easing redux – TD Securities

According to Mitul Kotecha, senior emerging markets strategist at TD Securities, Asia's growth outlook is unlikely to improve soon as a plethora of global factors allied with weaker Chinese activity and ongoing trade tensions, suggests further pressure on regional activity.

Key Quotes

“The only silver lining is that the pace of decline is slowing, amid improvements in the second derivative of data releases, while there are some indications that semiconductor prices are stabilising.”

“Many countries in the region have revised their growth forecasts lower, while embarking on more aggressive monetary and fiscal stimulus. We expect further rate cuts across the region, alongside more fiscal stimulus.”

“China continues to play a key role, with China's July data dump disappointing expectations, while USDCNY continues to push higher. This is particularly negative for KRW, SGD and TWD and we look for further deprecation.”

“We also think Asian high yielders will be more vulnerable as market volatility rises, and expect both INR to IDR to struggle to make much headway.”