Asia Faces Highest-Risk Q3

In assessing the economic outlook for Asia, analysts at Nomura explain that their long-standing view is that Q3 2018 is the highest-risk quarter for a painful snapback as the risk premium is repriced, FXStreet reported. It said: Asia’s economies are exposed to high oil prices, rising US rates, trade protectionism and China resuming its slowdown. India and parts of Southeast Asia are the region’s new stars in terms of rising long-run potential growth. “In China, we expect moderate policy easing in the coming months as the economy feels the pinch from deleveraging. In Korea, we believe the Bank of Korea will hike in November 2018 and once more in 2019, taking the terminal rate to 2%. In India, the macro outlook is likely to become murkier due to slower growth, higher interest rates and political uncertainty. In Indonesia, we expect growth to rise, boosted by coordinated policy stimulus and reforms gaining more traction. In Australia, solid growth and a gradual rise in inflation should lead to a rate hike in early 2019.”