AUSTRALIA
Bank lifts forecasts
The Reserve Bank of Australia yesterday lifted its inflation and wage growth forecasts while predicting that unemployment would remain under 4 percent through the middle of 2024. Headline inflation is expected to reach 7.75 percent by December, the central bank said in its quarterly Statement on Monetary Policy. The headline and core measures are predicted to remain well above the bank’s 2 to 3 percent target over the next year before hitting the top of its band at the end of the forecast period in December 2024. The outlook assumes the cash rate will rise to 3 percent by December from 1.85 percent at present and then “decline a little” by the end of 2024, it said.
INDONESIA
Expansion beats estimates
The economy expanded better than estimates in the second quarter, powered by a commodity-led exports boom and robust spending that could nudge Bank Indonesia to begin its rate liftoff. GDP grew 5.44 percent in the three months to June from a year earlier, Statistics Indonesia said yesterday. That is the fastest increase in four quarters and beats the median estimate of a 5.17 percent gain in a Bloomberg survey. Compared with the previous quarter, GDP expanded 3.72 percent, beating the consensus for a 3.47 percent rise. Southeast Asia’s largest economy is steadily gaining momentum after a broader reopening that spurred mobility and travel especially during the Ramadan and Eid holidays. Growth in private consumption, which makes up more than half of domestic output, quickened to 5.51 percent last quarter from 4.34 percent in the January-March period.
FOOD
FAO index declines
The Food and Agriculture Organization’s (FAO) world price index declined again last month, edging further away from record highs in March. The index, which tracks the most globally traded food commodities, averaged 140.9 points last month versus a revised 154.3 for June. The June figure was previously put at 154.2. Last month’s index was still 13.1 percent higher than a year earlier, pushed up by the impact of the invasion of Ukraine, adverse weather, and high production and transport costs. A bleak global economic outlook, currency volatility and high fertilizer prices — which can affect future production and farmers’ livelihoods — all pose serious strains for global food security, FAO lead economist Maximo Torero said.
E-COMMERCE
Alibaba avoids contraction
Alibaba Group Holding Ltd (阿里巴巴) posted better results than many investors feared, avoiding a sharp sales contraction while signaling an improvement in Chinese consumer sentiment in the past few months. Revenue shrank for the first time on record in the June quarter, albeit by a fractional amount that was less than analysts projected. China’s e-commerce leader reported revenue of 205.6 billion yuan (US$30.4 billion) in the June quarter, enough to beat projections for 204 billion yuan. Net income fell 50 percent to 22.7 billion yuan, even after Alibaba trimmed losses at newer businesses such as local services and the cloud. Alibaba is still grappling with the fallout from nationwide COVID-19 lockdowns and a near-economic contraction in China. Still, consumption began recovering from June and quickened last month, Alibaba chief executive officer Daniel Zhang (張勇) said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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