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CENTRAL BANK MEETINGS

People Bank of China (PBOC) (22 Jun)

We expect the PBOC to keep the 1Y LPR unchanged next week despite continued softness in domestic demand. While retail sales, investment, and credit growth remained weak in May, resilient exports and stable industrial activity should provide sufficient support to overall growth momentum. Export growth accelerated further, driven by stronger AI-related electronics demand and improving US-China trade sentiment, reducing the urgency for broad-based monetary easing. Meanwhile, elevated energy and commodity prices have pushed PPI higher, limiting room for additional rate cuts. Against this backdrop, policymakers are likely to maintain a more measured policy stance and rely on targeted fiscal support, including the proposed RMB2trn AI infrastructure programme, to support growth instead of lowering policy rates.

Bank of Thailand (BOT) (24 Jun)

We expect the BOT to hold its policy rate at 1.00% at its June 24 meeting, extending the unanimous decision to pause in April. Since the previous policy review, Thailand’s economic activity - from foreign tourism to private consumption and investment - has softened and has been negatively affected by the Middle East conflict, although still-robust, technology-driven exports growth has provided a cushion. The scope for further monetary easing has significantly narrowed amid elevated headline inflation of 2.8% yoy as of May, which sat near the upper end of the central bank’s 1-3% target range. However, given the supply-side nature of the inflation surge and the breathing room provided by the US-Iran interim peace deal, the BOT is likely to view the inflation spike as temporary and will refrain from raising rates in the near term.

FORTHCOMING DATA RELEASES

Hong Kong SAR

Exports growth is expected to remain robust at 42.3% yoy in May, supported by continued strength in external demand. China’s export growth accelerated from 14.1% yoy in April to 19.4% in May, driven by easing geopolitical disruptions following the Middle East ceasefire and stronger demand for AI-related electronics. Import growth is also expected to stay firm, reflecting sustained demand for intermediate and capital goods in line with resilient export orders.

On inflation, CPI is expected to remain stable at 1.7% yoy in May, despite elevated energy costs. Higher retail prices for diesel and premium gasoline are likely to be partly offset by the government’s relief measures, including diesel subsidies and reduced tunnel tolls for commercial vehicles. Meanwhile, housing-related inflation pressures have eased, with average residential rental yields peaking out and moderating from 2.86% in February to 2.82% in April, suggesting softer upward pressure on rental costs.

Singapore

Singapore’s inflation likely rose in May 2026, while industrial production growth accelerated. We expect headline inflation to increase to 2.0% yoy in May from a steady 1.8% yoy in April. This likely reflected a further pickup in private transport inflation, driven by larger increases in car prices and elevated petrol price increases on a yoy basis, along with a modest uptick in core inflation, despite muted accommodation inflation. We expect a slight uptick in core inflation to 1.5% yoy in May from 1.4% yoy, due to faster increases in food prices, and spillovers from higher energy costs to transport-related services, although offset by a tempered rise in healthcare costs.

We expect Singapore’s industrial production to accelerate to 28.0% yoy in May 2026, up from 17.6% yoy in April. The electronics cluster remained the primary driver, likely posting another strong month, supported by robust global artificial intelligence-related external demand and suggested by the exceptional 94.8% yoy jump in electronics domestic exports recorded in May. However, performance across manufacturing clusters likely remained uneven, particularly as chemical output continued to contract due to feedstock shortages caused by energy supply disruptions stemming from the Iran war.

Taiwan

Export orders in May are expected to maintain strong double-digit growth of 47% yoy, reflecting continued robust demand for AI-related semiconductors and server products, as well as higher product prices. Industrial production, which is measured in real terms and excludes price effects, is expected to moderate to high single-digit growth of around 9% yoy.

An interesting recent development is that demand from the US appears to have eased from its peak, while demand from ASEAN markets — particularly Singapore — has continued to gain momentum, helping to offset the moderation in US demand.

Another important observation is that the inventory-to-shipments ratio in the overall ICT sector remains around the neutral level of 1.0, suggesting that the industry cycle remains in an expansionary phase with no imminent signs of reversal.

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