Asian Central Banks: Reinforcement for 「hikers from strength」; relief for 「hikers from weakness」

Economic momentum remained strong in Asia heading into the last quarter of 2026. After Taiwan and Korea's GDP blew past expectations last week, Indonesia's GDP also surprised to the upside this week. Consequently, EMAX is tracking almost 6% in 3Q, a further acceleration over a strong first half as sources of growth broaden. While the October PMIs took a step down, this comes on the back of five-year highs being reached in September, and PMI levels remain elevated. Moreover, while Korea and Taiwan PMIs witnessed some payback, ASEAN PMIs continued to firm up in October and printed at an eight-month high. Resilient growth in the region against a hostile global backdrop (higher crude and DM rates) has meant that central banks in the region can be decomposed into those that are 「hiking from strength」 and 「hiking from weakness」. The case for the former continues, reinforced by this week's inflation prints. Bank Negara in Malaysia (BNM) expectedly held this week but showed more confidence aro