BoE likely to maintain guidance for gradually higher rates as long as Brexit has not been clarified, says DNB Markets
Yuan exchange rate likely to be defended by Chinese regulators as long as trade talks continue, says Scotiabank
RBNZ likely to leave OCR on hold at 1.00 pct next week, leave door open to further cuts: ANZ Research
EM Asian currencies likely to advance if US and China make concrete progress in renewed trade negotiations, says Scotiabank
New Zealand’s annual current account deficit narrows in Q2, net international liability position widens
Persistent trade-tensions likely to cap the upside on overall investment activity in Malaysia, says ANZ Research
Persistent trade-tensions and subdued demand for technology products to cap the upside on overall investment activity from re-negotiated public projects in Malaysia, according to the latest report from ANZ Research.
Private consumption, the mainstay of growth, accelerated to 7.8 percent in the quarter (Q1: 7.6 percent y/y). Meanwhile, public consumption growth moderated to 0.3 percent y/y in Q2, after rising 6.3 percent y/y in Q1 19. Export growth was unchanged from the previous quarter at 0.1 percent y/y as external demand remains weak.
At the same time, imports contracted by 2.1 percent y/y (Q1: -1.4 percent y/y) as intermediate and capital goods imports weakened. Consequently, net trade made a larger positive contribution to growth in Q2 than in Q1 (1.4ppt in Q2 compared to 0.9ppt in Q1). Investment contracted for the second straight quarter, although it posed a smaller drag of 0.2ppt to overall growth in Q2 (Q1: -0.9ppt).
Gross fixed capital formation contracted by 0.6 percent y/y (Q1: -3.5 percent y/y) on the back of a 4.2 percent y/y decline (Q1: -7.4 percent) in ‘machinery and equipment’ investment. Public investment remained weak (Q2: -9.0 percent y/y), although private investment improved to 1.8 percent y/y in Q2, from 0.4 percent previously.
On the other hand, inventories were drawn down at a quicker pace than in Q1, and so accounted for a larger drag on growth in the quarter. (0.7ppt in Q2 compared to 0.5ppt in Q1). From a sector perspective, the performance was mixed.
Activity in agriculture and services sectors moderated to 4.2 percent y/y and 6.1 percent y/y in Q2 (from 5.6 percent and 6.4 percent respectively in Q1). However, a rebound in the mining and quarrying sector (particularly natural gas) provided an offset. At the same time, manufacturing activity posted a marginal improvement (Q2: 4.3 percent y/y, Q1: 4.2 percent y/y).