Reserve Bank of India hike rates by 50 basis points
India’s central bank raised its benchmark interest rate by 50 basis points to 5.9%, in line with expectations of analysts polled by Reuters
The fourth consecutive increase comes as consumer inflation in the country hit 7% in August and the currency’s weakened to record levels.
Central banks in Asia have been raising rates in line with the US Federal Reserve.
— Abigail Ng
Japan movers: Softbank, Nintendo, Toyota fall
Apple suppliers in Asia fall after analyst downgrade
China reports better-than-expected factory activity for September
China’s official manufacturing Purchasing Managers’ Index surprisingly grew in September to 50.1, much higher than the 49.6 predicted by analysts in a Reuters poll.
The 50-point mark separates growth from contraction. PMI prints compare activity from month to month.
Meanwhile, the Caixin/S&P Global manufacturing Purchasing Managers’ Index, a private survey of factory activity — reported a contraction with a reading of 48.1.
“Subdued demand conditions and lower production requirements led firms to cut back on their purchasing activity in September, with the rate of decline the quickest in four months,” the Caixin press release said.
The official non-manufacturing PMI came in at 50.6 in September, down from 52.6 in August.
— Abigail Ng
Factory activity in China expected to contract again
China’s official manufacturing Purchasing Managers’ Index for September is expected to come in below the 50-point mark separating growth from contraction, according to a Reuters poll of analysts.
Economists expect a figure of 49.6, slightly higher than August’s 49.4, which would mark the third consecutive month of contraction.
PMI readings are sequential and represent month-on-month expansion or contraction.
A private survey of Chinese factory activity is also due on Friday, and analysts polled by Reuters predict that the print will come in at 49.5.
— Abigail Ng
Japan’s industrial production rises more than expected
CNBC Pro: Is the Fed on the right track? Wall Street veteran Ed Yardeni says this is what it should do next
The US Federal Reserve announced yet another 75 basis point hike earlier this month, sending the federal funds rate up to a range of 3% to 3.25%. The central bank also signaled it may raise interest rates up to as high as 4.6% in 2023 to control inflation.
Ed Yardeni, the economist who coined the term “bond vigilantes,” gives his take as the Fed’s response to inflation comes under intense scrutiny.
Pro subscribers can read more here.
— Zavier Ong
Fed’s Loretta Mester says interest rates are not yet restrictive
Cleveland Federal Reserve President Loretta Mester said interest rates are not yet restrictive, and there’s more to be done to bring down inflation.
“Inflation is still at a 40 year high,” Mester told CNBC’s Steve Liesman during an appearance on “Squawk Box.” “So right now the conversation has to be we have to do, what we must do to get back to price stability, because we can’t have a healthy economy, we can’t have good labor markets over time, unless we get back to price stability.”
Mester said she’s probably “a little bit above the median path” among Fed officials when it comes raising interest rates, citing the persistence in inflation.
“We’re still not even in restrictive territory on the funds rate, so you’re right, we’ve moved the funds rate up 300 basis points this year, but look how high inflation is,” Mester said.
— Sarah Min