Macro Data

In the US, the flash Oct Markit PMI reading edged up 0.2ppt m-m to 51.3. While manufacturing activity continues to expand, the mild pace of expansion reflects the sluggishness in the economy. On the housing front, new single-family home sales rose 5.7% m-m to seas adj ann rate of 389,000 in Sept. Median prices also rose 11.7% y-y in Sept, signalling an improving housing market. In the EZ, economic activity remained continued to contract.

The EZ composite PMI declined from 46.1 in Sept to 45.8 in Oct - the lowest level in more than 3 years. The German Ifo business confidence index also fell to 100.0, from 101.4 in the preceding month. This suggests that notwithstanding the ECB’s recent commitment to OMT, the underlying fundamental macro headwinds confronting the bloc still persist.

In Thailand, exports unexpectedly rose 0.2% y-y in Sept, reversing from a contraction of 6.95% in the preceding month. Still, the broader export trend is still down amid sluggish external demand. Recall the Bank of Thailand (BoT) eased in October, cutting the benchmark one-day bond repurchase rate by 25 bps to 2.75% after standing pat for the five consecutive meetings. BoT explained that the motive for easing then was largely to boost domestic demand as growth is likely to come in
weaker-than-expected in 2013.

In China, HSBC flash manufacturing PMI reported 49.1 in October, the highest reading in 3 month period, yet still indicating a slight contraction in manufacturing activities. The improvement in HSBC manufacturing PMI adds to our bet that China’s economic growth is bottoming out.

In Australia, CPI rose by 1.4% q-q in 3q12, accelerated from the 0.5% q-q pace in 2q12. On y-y basis, CPI rose by 2.0% y-y in 3q12, faster than the 1.2% y-y pace in 2q12. Though the rising inflation somehow pares the bet on RBA rate cut, a further 25 bps benchmark rate cut is still likely by the end of the year.