Macro Data

In US, non-manufacturing PMI fell to 54.2 in Oct from the 55.1 reading in Sep, indicating a slightly slower expansion. As reported earlier on 1 Nov, US manufacturing PMI rose to 51.7 from September 51.5, indicating a slightly faster expansion.

In China, HSBC service PMI reported a drop to 53.5 in Oct, from the 54.3 reading in Sep, indicating a slowing expansion in service sector. This contrasts to the earlier announced government non-manufacturing PMI, which reported an improvement to 55.5, rebounding from the earlier 53.7. As announced earlier, both HSBC manufacturing PMI and government official manufacturing PMI registered an improvement in Oct, adding to our conclusion that China is bottoming out, though likely in a slow pace.

In Hong Kong, HSBC PMI rose to
50.5 in Oct from earlier 49.6 in Sep, indicating an expansion in business activities.

In Taiwan, inflation slowed for a second consecutive month, reporting 2.36% y-y in October, compared to a 2.96% y-y pace in September. The central bank held the benchmark interest rate for a fifth meeting in September to damp price gains even as the global slowdown crimps demand for the island’s goods. The easing inflation would grant potential for the central bank to conduct further rate cut.

In Australia, retail sales rose by 0.5% m-m in September, after a 0.3% m-m growth in August. In the third quarter, the retail sales fell by 0.1% qq, after it advanced 1.2% q-q in 2q12. TD inflation reported a 0.1% m-m growth in October, after rising 0.2% m-m in September. On y-y basis, the price index advanced 2.4% y-y, falling near the middle of central bank’s target range of 2-3%. A separate report shows that the nation’s performance of service index rose slightly to 42.8 in Oct, compared to 41.9 in Sep, still indicating a major contraction. With the inflation still tame, the central bank governor Stevens Glenn might consider a further 25 bps benchmark rate cut in the policy meeting later today.

In Indonesia, economic growth registered a growth of above 6% for a eighth quarter as domestic consumption and rising investment countered the weak external demand. GDP grew by 6.17% y-y in 3q12, compared to a 6.37% y-y gain in 2012. The robust economic growth reduces the need for the central bank to cut interest rate.