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CENTRAL BANK MEETINGS

People Bank of China (October 20)

We expect the PBOC to keep the 1Y LPR unchanged next week. Industrial production is expected to edge up from 5.2% yoy in August to 5.3% in September, supported by firm external demand. Exports stayed strong, rising 36.3% yoy in September, driven by the regional AI-electronics upcycle.

Domestic momentum, however, remains uneven. Retail sales growth is expected to moderate to 0.3% yoy in September. Household sentiment is weak amid uncertain job prospects, slower income growth and elevated precautionary savings, while subdued property prices continue to weigh on household wealth and consumption. Investment also stays weak, with fixed asset investment expected to contract further by 7.5% yoy ytd in September. Corporate investment is cautious amid the anti-involution campaign and geopolitical tensions, while the property sector continues to be a major drag.

Policymakers are likely to maintain a measured policy stance, relying on targeted fiscal support to sustain growth rather than further rate cuts.

Bank Indonesia and Bangko Sentral ng Pilipinas (Oct 21 and 22).

Bank Indonesia is expected to extend its pause, as they lean on non-rate measures, including intervention and hedging facilities to help the currency. Any ensuing risk-off move in the currency, after MSCI index provider’s update on a potential shift in Indonesia’s status to a standalone status (after consultations are complete in mid-2027), would likely prompt greater central bank vigilance and intervention.

Our base case for the benchmark rate to be held unchanged this quarter, backed by a lower conviction around back-to-back US rate hikes in Oct and relative rupiah stability. Separately, the government announced additional support for low-income households in 4Q by way of in-kind assistance and wage subsidies. This year’s fiscal deficit is likely to close in at -2.85% of GDP, close to our forecast at -2.9%, but few uncertainties facing the 2027 math (note).

We expect a 25bp hike from the BSP to 5.25% in October, after three rate increases earlier in the year. Rising by the highest pace in Asia, Philippines inflation surged to 7.2% y/y in September from 6.1% in August, matching this year's peak and approaching a three-year high. Inflation risks remain tilted to the upside, driven by further public transport fare adjustments, elevated oil prices, recent wage hikes and peso depreciation. Fiscal space is, meanwhile, limited to support households, via subsidies and/ instate price caps. Governor Remolona also signalled that the BSP remains ready to act on rates to contain inflation. With inflationary pressures likely to be persistent, the likelihood of further hikes in 4Q26 rises.

Bank of Korea (October 22)

The Bank of Korea is expected to hold its policy rate at 3.00%, following back-to-back rate hikes in July and August. AI-driven growth momentum remains strong, as reflected in September export growth of around 80% YoY. However, the urgency for further tightening has eased, with CPI inflation stabilising at 2.9% YoY in September. The recent KOSPI correction and continued KRW strength also reduce the need for another near-term hike. We maintain our call for a final 25bp rate hike in November, bringing the policy rate to 3.25% by year-end.

FORTHCOMING DATA RELEASES

Japan

September trade and CPI data are due shortly. Export growth is expected to remain solid at 24% YoY, supported by continued strength in AI-related semiconductor exports. CPI inflation is projected to rise notably to 2.6% YoY, driven by the phase-out of public utility subsidies, higher global energy prices, and persistent inflationary pressures from a weak yen. The BOJ is likely to increasingly acknowledge that its 2% inflation target is within reach. However, it is expected to keep rates unchanged at 1.25% at its October 29–30 meeting to assess the impact of the latest rate hike in September.

Taiwan

September export orders and industrial production data are due shortly. Export orders are expected to sustain 60% YoY growth, while industrial production is projected to expand by 20% YoY. The global AI boom faces growing headwinds from hyperscalers’ cash flow pressures, central bank rate hikes, and higher bond yields. However, our high-frequency indicators across AI demand (token expenditure), investment (hyperscaler capex and data centre construction spending), and supply (semiconductor sales and exports) show no clear signs of a significant slowdown so far.

Malaysia

Malaysia’s external demand likely remained strong in September 2026, while inflation edged up slightly. We expect export growth to sustain its robust expansion at 45% yoy, with momentum anchored by strong demand for electrical and electronics goods. Oil & gas shipments likely remained buoyant. However, high base effects prevented a faster pace of expansion.

We expect headline inflation to rise modestly to 2.1% yoy in September 2026. The renewed increase in global oil prices likely contributed to higher increases in domestic energy costs, although fuel subsidies continued to limit the cost pass-through and keep underlying inflationary pressures contained. Food inflation likely also firmed, with adverse weather conditions associated with El Nino posing upside risks.

Singapore

We expect Singapore’s core and headline inflation to edge up slightly to 2.3% yoy and 2.4% yoy, respectively, in September 2026, following modest increases to 2.2% yoy and 2.3% yoy in August. Inflationary pressures likely reflected firm private transport price increases amid higher petrol prices despite slower car price growth, the ongoing pass-through of higher global energy prices to fuel-exposed services items, positive contribution from elevated electricity & gas prices, firmer food inflation, and a slight increase in still-muted accommodation inflation. Firm, albeit not accelerating, inflation in September 2026, which may be close to its peak in the Monetary Authority of Singapore’s assessment, likely validated its decision to maintain SGD NEER policy settings at the October 2026 review, following two proactive tightening moves in April and July.

Hong Kong

CPI is projected to edge up from 1.7% yoy in August to 1.9% in September, supported by improving consumption sentiment and higher global energy prices. Mainland visitor arrivals increased by 29.0% yoy in September on a daily average basis, providing further support to retail spending and consumer-related services. Meanwhile, renewed conflict in the Middle East during the month has pushed up global energy prices, adding to upward pressure on utility and transport costs.

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