Asia Takes Centre Stage with RBI Decision Looming
The upcoming week in Asia will be dominated by the Reserve Bank of India's decision on October 7. The consensus is for a 25-basis-point hike, but expectations are divided.
MUFG Research is officially forecasting RBI to keep rates on hold, but notes that a rate hike cycle is likely to begin from December. A rate increase could signal a shift in the central bank's stance towards tightening. MUFG Research predicts 50 basis points of rate hikes, with a risk of 75 basis points total this cycle.
Inflation data will be released for several Asian markets, including the Philippines, Thailand, Vietnam, and Taiwan. The Bangko Sentral ng Pilipinas is expected to maintain its hawkish stance, but may consider cutting rates if oil prices and El Nino conditions improve in 2H2027.
In Japan, BOJ Governor Ueda's speech on October 6 will provide insight into the timing of the BOJ's next move. Wage data will also be released, showing a slowdown in headline labour cash earnings growth to 3.7% from 4.3%, but underlying base-pay momentum is likely to remain firm.