Week Ahead for Malaysia: Trade Data, Interest Rates and Najib's IPIC Trial (15 June 2024)

This week is packed with important events in global markets, despite the holiday break due to Hari Raya Aidiladha. Here's a rundown of what to watch:

Key Trade Data

Malaysia:

• The spotlight is on Malaysia's trade figures for May, set to be released on Thursday. In April, exports bounced back by 9.1% year-on-year, driven by machinery, chemicals, and palm oil, although the growth fell short of the expected 14.1%. Imports also rose by 15.6% y-o-y but missed the 17.8% forecast. Analysts believe April's slower momentum might be due to seasonal factors, not weakening demand. RHB Bank remains optimistic about Malaysia's trade outlook for 2024.

Indonesia and Japan:

• Both countries will release their May trade data on June 19. Additionally, Indonesia's central bank will announce its interest rate decision on June 20, with expectations that the rate will remain at 6.25%.

Major Court Cases

In Malaysia, the trial of former Prime Minister Najib Razak and former Treasury secretary-general Mohd Irwan Serigar Abdullah starts on June 19. They face charges of criminal breach of trust involving RM6.6 billion in government funds. The SRC International Sdn Bhd civil suit against Najib also continues on the same day.

Interest Rate Decisions

Indonesia:

• Bank of Indonesia is expected to maintain its rate at 6.25%. UOB forecasts a strong economic performance in 2024, driven by private consumption, government spending, and steady investment. They predict a gradual rate normalization starting in early 2025.

Australia:

• The Reserve Bank of Australia is also expected to keep its rates unchanged in their June 18 decision.

Economic Data Releases

China:

• On June 17, China will release a series of May economic indicators, including industrial production, retail sales, and property data. The country's loan prime rate announcement follows on June 20, with most forecasts predicting rates to stay at 3.45% for one-year loans and 3.95% for five-year loans. However, some expect a slight cut, considering potential future rate cuts by the US Federal Reserve.

US:

• Key US economic data includes May industrial production, retail sales, and business inventories on June 18; housing starts on June 20; and preliminary manufacturing and services PMIs on June 21. US markets will be closed on June 19 for Juneteenth, commemorating the end of slavery in 1865.

UK:

• The Bank of England's monetary policy decision on June 19 is likely to keep the rate at 5.25%, with the first rate cut expected in August. The UK will also release May inflation data on June 19.

New Zealand:

• First-quarter GDP data will be announced on June 20.

Summary of Key Events

• Malaysia: Trade data (June 19)
• Indonesia & Japan: Trade data (June 19), Indonesian interest rate decision (June 20)
• China: Economic indicators (June 17), loan prime rate (June 20)
• US: Multiple economic data releases (June 18-21), market closed (June 19)
• UK: Interest rate decision (June 19), inflation data (June 19)
• Australia: Interest rate decision (June 18)
• New Zealand: GDP data (June 20)