India Growth, SE Asia Inflation, US Labour and ECB Preview

DBS projects moderating growth for India and persistent inflation across Southeast Asia and the Eurozone, prompting expected rate hikes from the ECB and potentially the BOJ. Focus remains on US labor resilience and its impact on Fed policy and USD strength.

Key Takeaways

• 1.India's real GDP growth for 1Q26 is expected to moderate to 7.2%, driven by softer industrial activity and weak government expenditure.
• 2.The ECB is expected to implement a preemptive 25bps hike in the deposit rate to 2.25% at the June 11 meeting to anchor inflation expectations.
• 3.Inflation is rising in Indonesia (3.1%) and the Philippines (expected >8%), likely leading to further tightening by BI and BSP.

Table of Contents

• Summary
• Analysts
• Macro Insights Portal, GDP Nowcast: India's GDP growth likely to moderate in 1Q
• Indonesia and Philippines markets: Rising inflation, policy adjustments
• Eurozone markets: A hike on the cards
• USD Rates: Labour market watch
• FX Daily: KRW and JPY at crossroads