Last week, the Philippines raised USD1.5 billion from the sale of 10-year global bonds priced at 110 basis points above benchmark United States (US) Treasuries. The bonds carry a coupon rate of 3.75%. The issuance was strategically announced, riding on the back of positive market sentiment driven by strong US employment data released on 4 January. With the issuance, the Philippines became the first emerging market to offer offshore US dollar bonds this year. Proceeds from the bond sale will be used for general purposes and budgetary support.
Japan’s current account surplus narrowed to JPY757.2 billion in November from JPY1.3 trillion in October. In the Republic of Korea, the current account surplus narrowed to USD5.1 billion in November from USD9.2 billion in October.
The Philippines’ trade deficit reached USD3.9 billion in November, up from USD3.3 billion in the same month in the previous year. Exports declined 0.3% year-on-year (y-o-y), a reversal from the 14.2% y-o-y increase posted in November 2017.
Malaysia’s industrial production in November increased 2.5% y-o-y, slowing from 4.3% y-o-y growth in October. The deceleration was due to a slowdown in manufacturing output, which grew 3.6% y-o-y in November versus 5.4% y-o-y in the previous month. In addition, the mining sector registered a decline in output of 0.7% y-o-y. On the other hand, output from the electricity sector expanded 3.2% y-o-y in November versus 2.8% y-o-y in October.
Consumer prices in the People’s Republic of China’s (PRC) rose 1.9% y-o-y in December after climbing 2.2% y-o-y in November. By category, the fastest increase in the PRC’s consumer price inflation came from food and medical products and services, with both rising 2.5% y-o-y. For full-year 2018, consumer prices rose 2.1%. The PRC’s producer prices, on the other hand, rose at a slower pace in December of 0.9% y-o-y versus 2.7% y-o-y in November. For full-year 2018, producer prices rose 3.5%.
Foreign reserves in Hong Kong, China; and Indonesia rose in December, while it declined in Malaysia Hong Kong, China’s foreign reserves amounted to USD424.6 billion at the end of December, up from USD423.2 billion in November. In Indonesia, foreign reserves climbed to USD120.7 billion at the end of December from USD117.2 billion a month earlier. Bank Negara Malaysia’s international reserves at the end of December amounted to USD101.4 billion, the lowest level of the year and down from USD102 billion at the end of November.
The Government of Indonesia is targeting to raise IDR5.0 trillion from the sale of savings retail bonds to be known as SBR-005. The offer period commenced on 10 January and will end on 24 January. The bonds will have a maturity of 2 years and carry an initial coupon rate of 8.15%.
Last week, local currency government bond yields declined for all tenors in the Philippines and Viet Nam, and for most maturities in the PRC and Indonesia. In contrast, bond yields gained for most maturities in the Republic of Korea, Singapore, and Thailand. Bond yields were mixed in Hong Kong, China and Malaysia. The spread between the 2-year and 10-year maturities widened for most emerging East Asian markets except for Indonesia and the Philippines.