“Although continued downward price pressures and sluggish loan demand present a solid case for further easing, the People’s Bank of China may opt to hold off until a more opportune window,” ING economists said. They continue to forecast a 10-basis-point rate cut and a 50-basis-point reserve requirement ratio reduction before year-end.
Focus will also be on an EU-China summit, held amid escalating bilateral tensions. The two sides have clashed over tit-for-tat trade measures involving products like brandy and electric vehicles.
South Korea
The Bank of Korea will release second-quarter GDP data on Thursday. South Korea's economy is expected to have rebounded after contracting in the first quarter.
Support from central bank policy easing and government fiscal stimulus likely contributed to second-quarter expansion, after GDP shrank 0.2% on-quarter and stalled at 0.0% on-year in the first quarter, economists said.
The country's legislature passed its first supplementary budget for 2025 in early May, and the BOK cut its policy rate by 25 basis points later that month.
Most economists expect continued monetary and fiscal support, as the export-reliant economy faces headwinds from the Trump administration's sweeping tariffs and sluggish domestic demand.
Nomura analysts said that July's second extra budget could prompt the BOK to raise its GDP growth forecast to 1.0% from 0.8%. The economy grew 2.0% in 2024.
Malaysia
Malaysia's statistics department will release June CPI data on Tuesday afternoon.
June's inflation is expected to ease to 1.1% from 1.2% in May, amid softer food and transport prices, said ANZ economist Bansi Madhavani.
Malaysia's expanded sales tax, effective July 1, includes a 5% tax on near-essential imports like food and machinery, and 10% on luxury goods and alcohol. However, its limited scope means the inflation impact should be minimal, she said. ANZ expects Malaysia's inflation to remain manageable at around 2.0% in 2025.
Singapore
Singapore will release June inflation data on Wednesday, with markets watching for signs of softening price pressures.
Core inflation likely remained subdued, despite a slight uptick, Barclays said in a note. It expects a more noticeable rise in headline inflation, driven by higher certificate of entitlement premiums for car ownership.
While Singapore's central bank doesn't have an explicit inflation target, it considers core inflation just below 2% consistent with overall price stability.
--Any references to days are in local times.
Write to Jessica Fleetham at jessica.fleetham@wsj.com and Jihye Lee at jihye.lee@wsj.com
(END) Dow Jones Newswires
July 20, 2025 17:14 ET (21:14 GMT)
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