Central bank meetings

Bank Indonesia (Nov 19): We see a more than even chance that the central bank will lean towards a pause in November due to a weaker currency whilst pushing for faster policy transmission. Expectations for a December rate cut by the US Fed have also been tempered after relatively hawkish remarks by the FOMC chair last month. BI expects two rate cuts from the US Fed by 1Q26 in its baseline view. In the interim, the central bank is likely to encourage faster policy transmission and undertake macroprudential measures to lower the effective lending rate. Deputy Governor Aida S. Budiman had remarked that despite 150bp cuts by the BI since second half of 2024, banks had only lowered loan rates by 15bp, while markets-based rates, i.e. interbank rates (IndoNIA is down ~230bp vs Aug24) and 6-month SRBI yields (-240bp since Aug24), had fallen more notably. Commentary is likely to stay dovish to keep the door open for further easing towards late-2025 and early 2026.

The People's Bank of China (Nov 20): The PBOC is expected to keep the 1Y LPR steady at 3.00%, while recent US-China trade truce gives policymakers additional room to assess the effects of policy measures. The ongoing “anti-involution campaign” has begun to yield results: decline in producer prices has eased further to -2.1% in October, and core CPI has recorded seven consecutive months of accelerated growth. To address sluggish fixed-asset investment (FAI), the National Development and Reform Commission has allocated RMB500bn in policy-based financial instruments to accelerate infrastructure projects. Nevertheless, household sentiment remains subdued amid weak job prospects, slowing income growth, and elevated precautionary savings, while falling property prices continue to offset any wealth effect from equities. Looking ahead, the PBOC is likely to maintain an accommodative stance to reduce borrowing costs and encourage reinvestment, with additional easing through quantitative measures also on the horizon.

Forthcoming data releases

Japan: The preliminary estimate for 3Q GDP, along with October trade and inflation data, is due this week. GDP is expected to show a qoq (saar) contraction of 1.6%, partially offsetting the 2.2% growth recorded in 2Q. Consumption weakened in 3Q as households, pressured by elevated living costs and declining real incomes, cut back on discretionary spending. Exports also slowed following the implementation of US reciprocal tariffs in August. October trade data are likely to confirm a further decline in exports, reflecting weaker US demand.

October CPI inflation is projected to return to 3% yoy. The reduction and removal of subsidies for utilities and basic water charges have raised household costs, while a weaker yen has continued to amplify import price pressures.

The combination of weak growth and persistent inflation is likely to prompt the new government to accelerate the compilation of a 2025 supplementary budget during the current Diet session and to maintain a sizable 2026 general budget. The Bank of Japan will remain in a difficult position, balancing growth risks against stubbornly high inflation in setting its monetary policy.

Malaysia: Malaysia’s economic data for October 2025 will likely reflect continued goods exports growth, and an ongoing, yet contained, uptick in headline inflation. We expect goods exports expansion of 10.5% yoy in October, building on September’s 12.2% yoy surge. This was mainly bolstered by electrical and electronics (E&E) shipments, despite other segments facing downside pressures from 19% US reciprocal tariffs. E&E strength was likely consistent with regional trends, amidst US tariff exemptions on electronics goods, and sustained artificial intelligence-related demand.

We expect an uptick in headline inflation to 1.6% yoy in October, extending the fourth consecutive month of modest increase. Services inflation has been on an uptrend, stemming from expanded sales and services taxes effective since July. The targeted RON95 subsidy reforms, implemented from late-September, likely had a limited upside impact on inflation, given manageable global oil prices, the government’s calibrated approach, and contained upside demand pressures.

Singapore: We anticipate continued non-oil domestic exports (NODX) expansion of 7.5% yoy in October, following the reversal to 6.9% yoy growth in September. Support from the electronics segment likely persisted, in line with positive regional trends, amidst US tariff exemptions on electronics goods and sustained firm artificial intelligence-related demand. However, adverse base effects will become more apparent in 4Q25. Other NODX shipments were supported by low base effects in yoy terms, although external demand for non-electronics products likely faced ongoing headwinds from high US reciprocal tariffs globally that became effective from August. The front-loading momentum that bolstered strong non-oil re-exports (NORX) expansion in September might be tough to sustain.

Thailand: We expect a step-down in Thai real GDP growth to 1.7% yoy in 3Q25, compared to the resilient 2.8% yoy expansion in 2Q. The overall growth moderation was likely due to weakened domestic demand amidst softer private consumption and investment, a continued decline in foreign tourism, and a contraction in manufacturing output. While US tariffs started to temper goods exports growth, it was likely resilient with a double-digit expansion, bolstered by electronics shipments. Slower goods imports growth helped to contain the dampening effect on net trade.

Hong Kong: Consumer prices are set to rise from 1.1%yoy in September to 1.3% in October, mainly due to base effects. The average residential rental yield remains steady at 2.94%, little changed from a year ago. At the same time, local resident departures rose 11.5%, outpacing the 10% increase in mainland tourist arrivals, likely putting modest downward pressure on prices for basic food, durables, and clothing.

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