July 11th, 2008

Thailand
PM Samak said post-coup constitution needs to be amended to prevent it being too easy to dissolve political parties by court order
- understands that this will cause a crisis but willing to face whatever crisis is possible
- govt ready to increase budget deficit to 3% from 2.5% planned if growth is sub-5%
BoT to have meeting on Wed and expect 25bp hike to 3.5%

South Africa
weakness in US has helped ZAR by pushing out US rate hikes further out increasing carry attractiveness
at some point strong reversal in the cards as concern for US economy will hit carry ccy's with shaky fundamentals
7.60 to hold, long term still see 8.22
MPC still to hike rates in August, and maybe even in October (though market has turned doveish)
- dove dynamic should hold until next CPI/PPI release which will bring back inflation fears
Retail Sales on Wed, expected -1.3%

Singapore
Retail Sales on Tuesday / NoDX on Thursday

Malaysia
Inflationary pressure to be countered with higher rates and ccy appreciation