The Week Ahead: Tariff Day

We are just days away from the implementation of US tariffs on $50 billion of Chinese-made goods. China will respond with its own tariffs on $50 billion of US imports. There is still time for the White House to retreat before 6 July. But no one is holding their breath.

Staying in the US, both core and headline inflation numbers are expected to have been marginally lower in June. Core inflation, which strips out volatile elements, could come in at 2.1%. The headline rate could be 2.7%. This could increase the Fed’s resolve to raise interes rates in September.

China will also report inflation numbers. Economists expect the cost of goods to have risen 2.1% year on year in June. The country will also report balance of trade for June. A surplus of US$49 billion has been pencilled in. That could be worse that a waving a red rag in front of the White House.

There are inflation numbers for India too. They are expected to show another rise to 4.9%. In April, inflation rose to its highest for four months because of higher food and fuel prices. Could be a good excuse for the Reserve Bank of India to raise interest rates.

Retail sales are expected to have risen again in Indonesia in May, which would make it four consecutive months of gains. In April, the main drivers were food, energy, clothing and household equipment.

The central bank of Malaysia has an interest-rate decision to make next week. Unlike some of its neighbours in South East Asia, the Malaysian ringgit has been surprisingly resilient against the rising dollar. That should provide Bank Negara Malaysia some room for to maintain accommodative support for the economy.

And finally, Singapore will provide the first estimate of economic growth for the second quarter. It is expected to show a slight slowdown from the first three months of the year.

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