Philippine central bank raises rates by 50 basis points
The Philippines’ central bank raised interest rates by 50 basis points to 5.5%, in line with analysts’ forecasts in a Reuters poll and lifting the key rate to a 14-year high.
The Bangko Sentral ng Pilipinas (BSP) is likely to continue raising rates in early 2023, after the US Federal Reserve, said Mohamed Faiz Nagutha, ASEAN economist at Bank of America Global Research on “Squawk Box Asia” by CNBC.
It added that the central bank will continue to raise its benchmark interest rate to 6%, or 50 basis points from the current rate.
– Charmaine Jacob
China reopening ‘necessary’ to reduce US inflation: Siegel
China’s economic reopening is overdue but much needed to rein in inflationary pressures in the US, Wharton School of Business professor Jeremy Siegel told CNBC’s “Street Signs Asia.”
“For the United States, we import a lot from China, if those supply chains are normalized, that would reduce inflation, so I applaud China’s move,” he said. “It’s too late, it should have been sooner, but it’s necessary,” he said.
Siegel added that he expects the US Federal Reserve to raise rates one more time at the February meeting by 25 basis points before pivoting.
– Jihye Lee
November retail sales in China have a major error
China’s industrial production in November grew 2.2%, after seeing a 5% rise in October, according to official data. That’s below expectations for 3.6 percent growth in a Reuters poll.
Retail sales fell 5.9% on an annualized basis, beating expectations for a 3.7% drop in a Reuters poll and a 0.5% drop in the previous month.
– Jihye Lee
JPMorgan expects Asian markets to end the week on a cautious note after the Fed hike
JPMorgan expects markets in the Asia-Pacific region to end the week on a cautious note following the Federal Reserve’s 50 basis point interest rate hike.
“Given the US market’s reaction after the FOMC meeting, we expect Asian markets to end the week on a more cautious tone,” said Tai Hui, chief market strategist for Asia-Pacific of the firm, in a note.
Tai added that a weaker inflation impression is needed before the Fed’s hawkishness fades, while the region may have more optimism about China’s expected reopening.
“The medium-term outlook for China’s economic reopening and the resilience of Asia’s domestic demand could be a bright spot as the US and Europe face further growth challenges,” Tai said. “We’re going to need weaker inflation data for the Fed to tone down its falsehood.”
– Jihye Lee
South Korea’s revised trade data shows a slightly narrower trade deficit
South Korea’s revised trade data for November was flat, official data from the Bank of Korea showed.
Imports grew 2.7% while exports fell 14%, in line with the previous month’s readings, leading to a trade deficit of $6.99 billion, slightly narrower than the reading of previous month of 7.01 billion dollars.
Import prices rose 14.2% from a year ago, after registering 19.8% growth the previous month. Export prices rose 8.6% in November from a year ago, after growing 13.7% in October.
– Jihye Lee
Japan trade data beats estimates, reports wider-than-expected trade deficit
Japan’s exports and imports in November grew more than expected on an annualized basis, official data showed.
Exports for the month rose 20%, beating expectations of 19.8% in a Reuters poll. Imports rose 30.3%, also beating expectations of 27% in a Reuters poll.
That led to a wider-than-expected trade deficit of 2.02 trillion yen ($14.91 billion) after posting 2.16 trillion yen ($15.96 billion) the previous month.
– Jihye Lee
CNBC Pro: Did you miss China’s reopening rally? Bank of America names global stocks for second stage
According to Bank of America, investors will get a second chance to participate in the stock market rally after China announced an easing of Covid-19 restrictions.
The bank named more than 10 stocks after finding “green shoots of recovery in high-frequency data” that point to rising earnings for companies exporting to China.
CNBC Pro subscribers can read more here.
– Ganesh Rao
Australia’s unemployment rate in line with expectations
Australia’s unemployment rate for November remained at 3.5% on an annualized basis, in line with expectations in a Reuters poll and flat from the previous month.
Official data from the Australian Bureau of Statistics showed the labor force participation rate also remained at 66.7% and the employment-to-population ratio remained at 64.4%.
Monthly hours worked increased to 1.89 billion.
– Jihye Lee
The Fed announces a rate hike of 50 points
The Fed announced that it will raise interest rates by 50 basis points, marking the end of the pattern of 75 basis points hikes seen in recent months.
Prior to this move, the Fed had raised rates by 75 basis points in the past four meetings. One basis point equals 0.01%.
The 50 basis point increase was widely expected ahead of the meeting.
It is the final policy decision expected from the central bank in 2022.
—Alex Harring
Powell wants “substantially more evidence” that inflation is cooling
Federal Reserve Chairman Jerome Powell said on Wednesday that recent positive signs of inflation are not enough for the central bank to scale back interest rate hikes.
“Substantially more evidence will be needed to have confidence that inflation is on a sustained downward path,” Powell said during his post-meeting news conference.
The comments came as the Fed raised its benchmark rate by another half a percentage point and signaled that at least three more quarter-point hikes are on the way. The decision also comes a day after November’s consumer price index reading rose just 0.1%, an indication that inflation may have peaked.
However, Powell said inflation remains a problem.
“Price pressures remain evident across a wide range of goods and services,” Powell added.
—Jeff Cox