CEIC Insights | Malaysia and Singapore fund flows; US onshoring; Coffee, cocoa and soybeans
Key analysis from the past seven days driven by CEIC's powerful blend of traditional and alternative economic data
Data stories of the week:
Equity fund flows to Malaysia and Fed loosening are supporting the ringgit
Inflows to a nation's bond and stock markets can significantly influence exchange rates. We can explore this trend in Malaysia and the broader ASEAN-6 bloc thanks to our partnership with EPFR and its wealth of data on fund flows and asset allocation.
Our chart tracks the USD/MYR exchange rate. Inflows to bond and equity funds gradually turned positive recently; July and August saw the ringgit jump against the dollar.
This month, fund inflows have tapered. Will this result in a near-term ceiling for ringgit appreciation? This might be unlikely – because of a move on the dollar side of USD/MYR.
The Federal Reserve Board just cut rates by 50 basis points, which surprised some observers. This will likely be supportive for ASEAN currencies against the dollar over the near term.
CEIC users, access the chart here.
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US manufacturing: a long road to reshoring
Trade and industrial policy remains in focus in the countdown to the presidential election. Former President Trump has long advocated for repatriating American manufacturing; Vice-President Harris vows to continue efforts to bolster supply chains with more "onshoring."
However, there are few signs so far that US corporations have moved production home (as opposed to “nearshoring” to beneficiaries like Mexico).
This chart examines balance of payments figures from the Bureau of Economic Analysis . "Net acquisition of financial assets" is an important metric. It is assumed that this figure would fall if significant reshoring was taking place: companies would sell operations abroad and repatriate capital to the US for expansion.
However, this indicator has been increasing for five consecutive quarters. This is a "net" metric, so reshoring could have been taking place -- but if it did, it was likely outpaced by continued direct investment abroad.
CEIC users, access the chart here.
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How Brazil's El Nino-hit soy harvest drove down shipping demand
Producers of global agricultural commodities face a complex environment that changes every year. Weather conditions, demand, and prices for inputs like fuel and fertilizer are all volatile.
We can gain insight into conditions for farmers in Brazil, the world's largest soybean producer, by considering a dataset recently added to CEIC: freight prices, as compiled by the National Supply Company (CONAB). Our chart tracks the average freight price for key export routes.
March to June is the peak season for soy exports, and freight prices usually rise accordingly. In 2024, however, the usual pattern did not occur. Instead, the average cost to ship to ports dropped 10% year on year -- even as the cost of diesel used to power trucks and trains rose 7%.
What happened? The atmospheric effect known as El Ni?o is a factor. It prompted heavy rainfall and flooding (and is currently exacerbating drought and wildfires). The result was a lower crop yield -- and, hence, less demand for freight.
The total volume of Brazil's soy exports from March to June fell 4% year-on-year to 54.7 million tons. As wildfires continue to burn, agricultural production is still at risk for the rest of the year.
CEIC users, access the chart here.
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领英推荐
Soaring cocoa, coffee and tea prices might not stabilize until 2025
Global commodity inflation is mostly in retreat, but aficionados of some of the world's favourite legal stimulants have yet to feel any relief.
A volatile climate sent prices soaring for coffee, tea, and cocoa – often grouped together as the "tropical beverages." Floods and droughts damaged tea crops in India and Sri Lanka. Ivory Coast and Ghana, which account for over half the world's cocoa production, were devastated by crop disease and poor weather.
We charted price projections from the Hamburg World Economic Institute (https://www.dhirubhai.net/company/hwwi/). Tropical beverages will post a whopping cumulative increase of 43% this year, even as the index for food drops 6.5%. (Metals will also see prices deflate.) Next year, HWWI predicts tropical beverage prices will increase "only" by 3%, but this will still be faster than other commodity segments.
CEIC users, access the chart here.
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Equity inflows mirror property and construction metrics in Singapore
We're continually tapping fund-flow data from our partners at EPFR to demonstrate how asset-allocation decisions, with their implications of heightened or waning confidence in an economy, can have a predictive relationship with bottom-up metrics.
In this case, we head to Singapore, where the government compiles statistics on construction contracts and publishes the Tender Price Index (TPI).
As stock inflows recovered after the 2020 pandemic shock, we can see a pickup in the value of construction tenders; both of our metrics eased off through 2021-22.
The TPI and indices of property prices and rents are usually moving in the same direction. The post-pandemic period was marked by surging property prices, driven by constrained supply and increased investor interest in real estate. And positive sentiment towards the equity market and the property sector often coincide.
CEIC users, access the chart here.
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Other News from ISI Markets
Macroeconomics and financial markets: linked in a moment of turmoil
During our recent webinar, "Central Banks in the Spotlight," we examined expectations of the Federal Reserve and the Bank of Japan, and the implications for the world's biggest creditor and debtor nations.
Alongside the on-demand webinar, EPFR and CEIC teams developed a comprehensive chart pack aimed to examine the market positioning before the selloff, as well as its consequences.
2025 Japan Economic Outlook
On?October 31, ISI Markets will host the?2025 Japan Economic Outlook?event in Tokyo, bringing together business and finance leaders to discuss Japan's post-pandemic recovery, growth, and key trends affecting global businesses and investors. CEIC’s machine learning-driven economic nowcasts will be featured alongside EPFR’s global fund-flow insights.
Back in the index: outlook for Zambia and Ghana sovereign bonds after restructuring
Join REDD for an insightful live webinar that will present the outlook for the new sovereign bonds emerging from Zambia and Ghana’s debt restructurings. Two high-profile market protagonists will provide their perspectives on opportunities and risks of the new bonds. They will also discuss their takeaways from the two African sovereigns’ journeys out of default.
Disclaimer: All written and electronic communication from ISI Markets and CEIC is for information or marketing purposes only and does not constitute or qualify as substantive research.