|Day's range||9.25 - 9.25|
Dec.03 -- Adarsh Sinha, co-head of Asia FX and rates strategy at Bank of America Merrill Lynch, discusses his investment outlook and the top 10 trades for 2020. He speaks on “Bloomberg Markets: Asia.”
(Bloomberg Opinion) -- About a year ago to the day, the U.S. yield curve inverted for the first time during this business cycle. Sure, it wasn’t the part that has historically predicted future recessions, but it foreshadowed the more consequential inversion — the part of the curve from three months to 10 years — which happened in March and lasted for much of the rest of the year through mid-October.This wasn’t much of a shock to Wall Street. Even in December 2017, many strategists saw an inverted yield curve as largely inevitable, with short- and longer-dated maturities meeting somewhere between 2% and 2.5%. That’s just what happened. It was enough to spur the Federal Reserve into action. The central bank proceeded to slash its benchmark lending rate by 75 basis points in just three months. Now the curve looks positively normal again.“Inverted Yield Curve’s Recession Flag Already Looks So Last Year,” a recent Bloomberg News article declared. Indeed, the prospect of the curve steepening in 2020 is drawing money from BlackRock Inc. and Aviva Investors, among others, Liz Capo McCormick and John Ainger reported. Praveen Korapaty, chief global rates strategist at Goldman Sachs Group Inc., told them the spread between two- and 10-year yields will be wider in most sovereign debt markets. PGIM Fixed Income’s chief economist Nathan Sheets said “the global economy has skirted the recession threat.”Yet beneath that bravado, the fear of another bout of yield-curve inversion remains alive and well on Wall Street.John Briggs at NatWest Markets, for instance, predicts the curve from three months to 10 years (or two to 10 years) will invert again, possibly for a couple of months, because the Fed will resist cutting rates again after its 2019 “mid-cycle adjustment.” “I see the economy slowing to below trend growth, the market seeing it and recognizing the Fed needs to do more, especially with inflation low, but the Fed will be slow to respond,” he said in an email. Then there’s Societe Generale, which is calling for the U.S. economy to fall into a recession and for 10-year Treasury yields to end 2020 at 1.2%, which would be a record low. Even though the curve doesn’t invert in the bank’s quarter-end forecasts, it’s quite possible during a bond rally, according to Subadra Rajappa, SocGen’s head of U.S. rates strategy.“Over time, if the data weakens, the curve will likely bull flatten and possibly invert akin to what we saw in August,” she said. “If the data continue to deteriorate and the economy goes into a recession as per our expectations, then we expect the Fed to act swiftly to provide accommodation.”To be clear, another yield-curve inversion is by no means the consensus. The prevailing expectation is that the economy is in “a good place” (to borrow Fed Chair Jerome Powell’s line) and that Treasury yields will probably drift higher, particularly if the U.S. and China reach any kind of trade agreement. In that scenario, central bankers will be just fine leaving monetary policy where it is.Bank of America Corp.’s Mark Cabana summed up the bond market’s base case at the bank’s year-ahead conference in Manhattan: There will probably be no breakout higher in U.S. economic growth (capping long-term yields) but also no need for the Fed to cut aggressively (propping up short-term yields). That should leave the curve range-bound in 2020.That range, though, is not all that far from zero. Ten-year Treasury yields are now 20 basis points higher than those on two-year notes, and 22 basis points more than three-month bills. At the end of 2018, those spreads were nearly the same — 19 basis points and 31 basis points, respectively. That is to say, it’s not much of a stretch to envision the curve flattening in a hurry if anxious bond traders clash with a patient Fed.For now, traders seem to be pinning their hopes on resilient American consumers powering the global economy, using evidence of strong holiday shopping numbers to back their thesis. My colleague Karl Smith isn’t so sure that’s the best strategy, given that the spending is actually weakening relative to 2018, plus it usually serves as a lagging indicator anyway. Markets are also on alert for any cracks in the U.S. labor market, which has been the bastion of this record-long recovery. November’s jobs numbers will be released Friday.As for the Fed, its interest-rate moves are a clunky way to fine-tune the world’s largest economy. But that’s not the case for addressing angst around the U.S. yield curve. If the central bank doesn’t like its shape, it has the policy tools to directly and immediately bend it back.It comes down to which scenario Fed officials consider a bigger risk in 2020: Allowing the Treasury curve to remain flat or inverted, or moving too quickly toward the lower bound of interest rates? Judging by dissents around the more recent decisions, this is very much an open question.To get another inversion, “you’d need a Fed that wants to hold policy constant through a period of economic weakness: front end remains anchored near current levels due to policy expectations, long end drops due to diminishing growth/inflation forecasts,” said Jon Hill at BMO Capital Markets. “Not impossible by any means.” An inversion would probably come in the first or second quarter of 2020, fellow BMO interest-rate strategist Ian Lyngen said, though that’s not his base case.That sounds about right. Fed officials seem satisfied with dropping rates by the same amount as their predecessors did during other mid-cycle adjustments. Now they want to wait and see how lower interest rates trickle into the economy, perhaps making them more entrenched over the next several months. It’s hard to say for sure, though, given that Treasury yields have behaved since the central bank’s last meeting. The market simply hasn’t tested the Fed’s resolve.Relative calm like that rarely lasts, particularly when one tweet on trade sends investors into a tizzy. The path forward is almost never as linear as year-ahead forecasts make it appear.The same is true for the yield curve. We might very well be past “peak inversion,” but ruling out another push below zero could be a premature wager.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
President Trump's latest hints at a delay in the U.S.-China trade agreement causes the yield on benchmark 10-year Treasury note to hit the lowest in the last four months.
Ireland's central bank will leave its mortgage-lending limits unchanged for the second straight year in 2020, saying on Wednesday that the measures have been effective in keeping house prices from climbing significantly higher. The central bank introduced limits in 2015 capping how much banks can lend for the purchase of a home relative to its value and the borrowers' income, in a bid to prevent any repeat of the excessive lending that devastated the economy a decade ago. The central bank did announce that it would not force local lenders to hold more capital under two buffers it levies on them - the countercyclical capital buffer (CCyB) and Other Systemically Important Institutions (O-SIIs).
(Bloomberg Opinion) -- Stay in one part of the market long enough and you’re bound to know which strategists tend to be bullish and which ones seem permanently bearish. U.S. Treasuries are no exception. Just consider these two divergent views from the ranks of the Federal Reserve’s primary dealers:Steven Major at HSBC Holdings Plc is among those who have long believed in lower-for-longer U.S. interest rates. He and I talked in mid-2016, when Treasury yields hit all-time lows, about how structural forces such as an aging global population create a nearly insatiable demand for safe fixed-income assets. He predicts the benchmark 10-year yield will finish 2020 at around 1.5%, compared with a median estimate of 2% in a Bloomberg survey. That’s bullish.His polar opposite might just be Stephen Stanley, chief economist at Amherst Pierpont Securities. Dating to at least mid-2017, Stanley’s prediction for the 10-year Treasury yield has always exceeded the median estimate.(1)That hasn’t changed for 2020 — he’s the only analyst among the 49 surveyed to see the benchmark U.S. yield back at 3% at the end of next year. That’s bearish.And then there’s John Dunham, who shatters the conventional labels. Dunham, managing partner at John Dunham and Associates, is more bearish on bonds in the coming months than anyone. He predicts 10-year yields will soar to 2.75% by the end of June and climb to 3.03% by the end of September. Even Stanley sees them merely gliding to 2.5% at mid-year and then 2.8% at the end of the third quarter. In Dunham’s scenario, current owners of 10-year notes would face a roughly 10% loss in 10 months.If Dunham’s right, though, those investors ought to hold on for dear life. By mid-2021, he suddenly becomes one of the biggest bond bulls on Wall Street, forecasting 10-year yields at 1.3% for the rest of that year. For those keeping track at home, that’s an even lower forecast than Major’s 1.5% estimate for year-end 2020.This type of market swing, of course, is hardly unprecedented. In fact, the 10-year Treasury yield plunged from 3.25% in November 2018 to just 1.43% in early September as bond traders shifted from expecting more Fed interest-rate increases to rapidly pricing in easier monetary policy. That 182-basis-point range is right in line with the type of move that Dunham envisions. Just on Tuesday, long-term Treasury yields tumbled 10 basis points, the sharpest drop since August.Still, few analysts (if any at all) actually come out and predict that sort of volatility. The tried-and-true playbook is to call for interest rates to rise gradually or fall from their current levels and then tweak those forecasts as the market moves. You just don’t see a forecast slice through the median and average as drastically as Dunham’s does.So, what explains such a turn of events? To Dunham, it’s fairly straightforward: Inflation will take off for a short period in 2020, followed by a recession after the U.S. presidential election (he hasn’t predicted who will win it). He explained his view to me over the phone:“I believe that the administration is going to just do everything it can to crank out money into the economy until the election, just to keep it going. And after the election, they’re not going to ... That in many ways is driving our forecast for a recession happening right after the election. Usually the first quarter is terrible anyway, so that makes good sense that the first quarter would be the time we would tumble into recession.When you start looking at business cost factors, the employment cost index has really been rising rapidly since the recession, we’re seeing the dollar up a lot, that takes up prices. The only thing that’s really been holding things down is commodity prices have been relatively flat. That’s going to turn at some point.We’ve been thinking — and I’ve been wrong about this, admittedly — that there will be decent inflation coming up for a while. We don’t model the Federal Reserve as independent, we model it as a trailing factor. It follows interest rates. That’s why we have them pushing up interest rates, up to that point that we hit recession.”While Dunham doubts the Fed has any ability to stoke inflation, it’s worth noting that just this week, the Financial Times published an article that said the central bank was considering a rule that would allow price growth to run above its 2% target in a “make-up strategy” for years of undershooting its goal. That has interest-rate strategists like Mark Cabana at Bank of America Corp. thinking that current market-implied inflation rates are probably too low.Dunham has called for a recession before. He said in mid-2015 that “we’re now at the peak of the business cycle. And over the next year, year-and-a-half, the business cycle is going to start to turn back into recession.” While that didn’t quite pan out, in that period here’s what did happen: The U.S. stock market swooned, real gross domestic product nearly turned negative and 10-year Treasury yields fell to unprecedented lows.His recession timeline also matches up with the historical signal given by the inverted U.S. yield curve. Three-month Treasury bills yielded more than 10-year notes for much of the period between late May and mid-October. That has usually indicated an economic downturn within 18 months or so. The curve from two to 10 years flipped to negative for a brief stretch in August. Cast those dates 18 months forward, and it’s right around the turn of the calendar from 2020 to 2021.Whether the world’s biggest economy follows that traditional rule of thumb is anyone’s guess. And, to be sure, the Fed has tried time and again to lift inflation only to see its preferred gauge remain stubbornly below 2% for almost all of the past decade. A lot will have to go right — and then wrong — for Dunham’s forecast to play out.At the same time, the likelihood that Treasury yields will hug the median in the coming year seems about equally as far-fetched. Last December, the median analyst forecast for where the 10-year yield would be at the end of 2019 was 3.32%. That’s shaping up to be off by about 150 basis points. It was a closer call in 2018, thanks in large part to the end-of-year bond rally, but the December 2017 consensus still wound up missing by a quarter-point.In other words, predicting the future is hard. Might as well forecast boldly.(1) I'm not including estimates that are a month or two from expiring, which all tend to converge to the prevailing yield level.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The U.S. Federal Reserve announced Wednesday it had terminated a 2015 enforcement action against Bank of America over its shortcomings in preventing traders from manipulating foreign exchange rates. The bank had agreed in May of that year to pay a $205 million fine and overhaul relevant policies after regulators charged several large banks with oversight shortcomings in foreign exchange markets. Alongside the fine, the bank had agreed to submit plans to improve its operations and additional Fed oversight.
Key drivers of this year’s late-cycle bull market gains are expected to shift as the global markets enter the new year, according to BofA Merrill Lynch Global Research, which was recently named Institutional Investor’s top research firm in the world. An interim, skinny U.S.-China trade deal should temporarily relieve trade concerns ahead of the U.S. presidential election and pave the way for a midyear, mini-boost in global growth led by U.S. rates and a weaker dollar. A rebound in U.S. corporate earnings should spur a long-awaited uptick in capital spending and lift the S&P 500 to another year-end high of 3300, or 6 percent above current levels.
FDIC-insured commercial banks and savings institutions' Q3 earnings negatively impacted by higher provisions and expenses, partly offset by elevated net operating revenues and loan growth.
(Bloomberg Opinion) -- For all the fears that the U.S. and China are unwinding the economic ties that drove decades of global prosperity, it's striking how much recent optimism depends upon the two countries. Just months ago, all the talk was about recession, stocks were tanking and tariffs flew back and forth across the Pacific. Now the S&P 500 is reaching record highs, global growth outlooks have steadied and pessimism among manufacturers appears to be abating. Expectations for a worldwide economic recovery soared in November compared with the previous month, according to a survey of fund managers by Bank of America Corp. “The bulls are back,” its strategists wrote.What changed? Two things. First, the world’s most important central bank delivered, and we’re starting to see the results. The Federal Reserve eased more aggressively than anyone dared hope at the dawn of 2019. Initially, there was some skepticism that Chairman Jerome Powell could pull off what he called a “mid-cycle adjustment” — that is, cutting rates enough to stave off the worst recession fears but not so much as to stoke asset bubbles. Yet markets appear satiated and U.S. employment, housing, retail and consumer-sentiment indicators have stabilized. All this was done against the backdrop of slow, steady easing in China, where the central bank started cutting reserve requirements well before the Fed moved, and trimmed borrowing costs further as the year wore on.Another factor is the prospect of trade detente between Washington and Beijing. Officials say they are discussing a “phase one” deal that would have both sides making concessions on agriculture, intellectual property and technology. While few expect a comprehensive pact to cease economic hostilities, confidence that some kind of agreement will be reached underpins the mildly positive case for the economy. After all, few things are as important to global growth as how the world’s two biggest economies interact with each other. To be sure, nobody is talking about a boom. Prospects for 2020 are looking decent because of reduced negatives rather than increased positives: Rates were too high and had been lifted too quickly, especially considering the fact that inflation hasn't come close to most major central banks’ 2% target. The Fed's key gauge of inflation rose a microscopic 1.3% in September, and China's factory-gate prices are falling, which exports lower prices to the rest of the world. Unlike the synchronized upswing that characterized 2017, a sort of synchronized stability might best describe 2020. The Organization for Economic Cooperation and Development last week said global growth is stuck at 2.9% this year and next. The expansion will pick up to a hardly inspiring 3% in 2021. Recent market ebullience speaks to how desperate investors have become for not-utterly-terrible news. Look closer, though, and this year’s rate cuts may not be as promising as investors hope. The Fed's moves reflected a deteriorating environment and manufacturing downturn as much as anemic inflation. The outlook could darken further, forcing Powell to cut again. Remember, a year ago the Fed was about to hike again and flagged multiple increases for 2019 — that didn’t last long. China, meanwhile, hasn’t delivered as much easing as many market participants would like. The cut in the benchmark rate that some predicted earlier this year hasn’t arrived. Beijing seems intent on minding its own garden, keeping the expansion from slowing too much and watching leverage.Trade optimists may be ripe for disappointment as well. Presidents Donald Trump and Xi Jinping came close to deal earlier in the year only to see relations sour and tariffs increase. China says it’s “cautiously optimistic,” but the lack of a deadline and Trump's predilection to blow up diplomacy on Twitter makes this a dicey bet. Not to mention the contours of any agreement could shift quickly as the 2020 election draws closer.So let's keep the merriment in perspective. The global economy is still a shadow of its former self, and neither of its two main drivers look too sturdy. The optimism blessing the final months of this year mainly comes down to the fact that both China and the U.S. are trying to avert disaster. Those investors humming a digitally remastered version of “Happy Days are Here Again” may wind up whistling past the grave. To contact the author of this story: Daniel Moss at email@example.comTo contact the editor responsible for this story: Rachel Rosenthal at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- It’s official: Charles Schwab Corp. has agreed to buy TD Ameritrade Holding Corp. for $26 billion in an all-stock transaction. Now the question on Wall Street is whether the acquisition, which would create a behemoth with $5 trillion in assets, will come under scrutiny from antitrust regulators. There are a number of arguments for an antitrust review. For one, Schwab is the market leader in safeguarding assets managed by registered investment advisers, holding about half the market. By purchasing TD Ameritrade, it would add another 15% to 20% share, according to a note from Keefe, Bruyette & Woods. The deal also could allow Schwab to boost fees on other services, or reduce interest paid to investors on their accounts. Effectively, the company eliminated commissions for U.S. stocks, exchange-traded funds and options, but that headline-grabbing move could very well mask hidden charges elsewhere.Bloomberg News’s Felice Maranz and David McLaughlin compiled a roundup of analysts’ expectations. Cowen analyst Jaret Seiberg suggested regulatory scrutiny could stretch into the third quarter of 2020. UBS’s Brennan Hawken sees “a lot of execution risk.” Bank of America Corp.’s Michael Carrier said Toronto-Dominion Bank’s 43% stake in TD Ameritrade could cause “some complications,” including tougher regulatory approval.While the potential hurdles are very real and Wall Street’s concern about them are valid, I’d add another concern: namely, that combining Schwab and TD Ameritrade could be considered “anti-trust” in a different way.One of Schwab’s main competitors, Fidelity Investments, was quick to release a statement on Monday that piggybacked on some of these concerns, noting that "acquisitions of this size can be long, complex, and unsettling.” Kathy Murphy, president of Fidelity’s Personal Investing business, added this:“Unfortunately for investors, the combination of Charles Schwab and TD Ameritrade means they will likely be doubling down on revenue practices that directly disadvantage investors, including paying extremely low cash sweep rates and taking significant payment for order flow. These practices can easily outweigh any benefit of $0 online commissions.”Schwab’s path forward most likely lies in expanding its reach in financial advisory services. That’s a highly personal industry by nature. Sure, some people are willing to take financial planning into their own hands, or use algorithms to help them invest. But even with the internet democratizing all aspects of society, it still feels like the average person would want to have someone holding their hand as they lay out a strategy to buy a house, or send children to college, or save most efficiently for retirement. When it comes to bond markets, for instance, it’s clear that a good chunk of investors don’t have a good handle on what fixed income is all about. Walt Bettinger, Schwab’s chief executive officer, said in a statement that the combined firm will “be uniquely positioned to serve the investment, trading and wealth management needs of investors across every phase of their financial journeys.” It’s an open question, though, whether Americans prefer to use a massive institution as a one-stop shop. As Cowen’s Seiberg pointed out, there’s something of a growing “anti-big business” sentiment focused on large banks and technology companies. Schwab would seem to be the cross-section of both of those targets.Many details on Schwab’s acquisition and the potential synergies are still to come. But industry consolidation and the growing emphasis on technological innovation will clearly put increased pressure on its small and mid-sized competitors. For those firms, “the risk is that they lose market share, including in smaller communities where more personal brick-and-mortar financial services are harder to come by,” according to Bankrate.com senior economic analyst Mark Hamrick. I’ve written before about how finance industry professionals can easily get lured into sweeping generalizations. In the case of discount online brokers, the line is that no-fee trading is a big win for the consumer. “I’ve been on that pursuit, that mission basically for almost 40 years,” Charles Schwab (the founder) said after the company’s move to zero commissions. “We just hope more people will come and enjoy the benefits that Schwab provides.”If successful, this combination will almost surely bring more investors under Schwab’s tent. It’s up to the company to convince them that even as an industry giant, it’ll always keep the little guy in mind.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Both Bank of America (BAC) and Citigroup (C) are well poised for growth on the back of strong fundamentals. But Citigroup holds an edge based on several factors.
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.Indonesia’s central bank left its key interest rate unchanged while pumping more liquidity into the financial system to stimulate Southeast Asia’s largest economy.Bank Indonesia kept the seven-day reverse repurchase rate unchanged at 5% on Thursday following four rate cuts this year, in line with the prediction of 21 of 31 economists surveyed by Bloomberg. Banks’ reserve requirement ratio was cut by 50 basis points, the first such decision since June.“This looks like a balancing act,” said Frances Cheung, head of Asia macro and strategy at Westpac Banking Corp. in Singapore. “Keeping the policy rate unchanged reflects the focus on maintaining rupiah stability,” while cutting the reserve ratio “fits into the objective of promoting credit expansion.”After 100 basis points of rate cuts since July, the central bank is taking a more cautious approach in providing stimulus to the economy, turning to additional instruments to spur lending. With growth likely to remain subdued amid a sluggish global outlook, Governor Perry Warjiyo said there’s still room for more policy easing, either through monetary levers or macroprudential tools.“Monetary policy remains accommodative and is consistent with controlled inflation in the target corridor,” Warjiyo told reporters in Jakarta. “Going forward, Bank Indonesia will monitor domestic and global economic developments in using its room to implement an accommodative policy mix.”But Coordinating Minister for Economic Affairs Airlangga Hartarto was quick to call for further easing, saying there is “quite a large room” for the central bank to further cut the rate given benign inflation and a stable currency. The benchmark rate at 5% is “pretty high” compared to countries such as the Philippines, Malaysia and Thailand, he said in a statement. The rupiah erased losses after the decision was announced to end little changed, while the yield on benchmark 10-year government bonds rose three basis points to 7.09%.“There’s nothing to suggest they’re done with rate cuts,” said Mohamed Faiz Nagutha, a Singapore-based economist with Bank of America, which has forecast an additional 75 basis points of easing over the next few months. “Our call remains for a full unwind of the 175 basis points of hikes from last year.”After raising rates last year to curb a currency rout, Bank Indonesia has switched its focus to supporting growth amid a global slowdown and the U.S.-China trade war. The central bank expects Indonesia’s economy to grow 5.1% this year.What Bloomberg’s Economists SaySignificant scope for seasonal year-end risk aversion likely keeps the policy rate on hold for now in support of the currency -- especially as recent reports suggest a “Phase One” trade deal between the U.S. and China may not get done in 2019. The central bank’s pause in its rate cut cycle may extend only a short while into 1Q 2020.Click here to read the full report.Tamara Mast Henderson, Asean economistInflation remains subdued, with consumer-price growth at a six-month low of 3.1% in October. The central bank said Thursday that inflation for the full year is expected around 3.1%, well within the target band of 2.5%-4.5%.A surprise trade surplus of $161 million in October eases pressure on the current-account deficit, which has been a key risk for the rupiah. The currency is up 3.5% against the dollar in the past year, among the top performers in Asia, with the bank saying it expects the currency to remain stable in line with fundamentals.Reserve RatioThe reserve requirement ratio for conventional banks was cut to 5.5% from 6%, and for Islamic banks to 4% from 4.5%, effective Jan. 2. Warjiyo said the RRR cut would add an additional 24.1 trillion rupiah in liquidity for commercial banks and 1.9 trillion rupiah for Shariah lenders.“Liquidity is sufficient,” but there’s a problem in terms of the distribution of liquidity between groups of banks, he said.Warjiyo said strong household consumption has kept the economy resilient, but falling imports of capital goods and raw materials show production hasn’t picked up significantly.The central bank “may resume its easing cycle in early 2020 to give growth momentum an added boost” and further the government’s investment-driven growth plans, said Nicholas Mapa, an economist at ING Groep NV in Manila.(Updates with comments economy minister in sixth paragraph)\--With assistance from Tassia Sipahutar, Harry Suhartono, Yoga Rusmana and Chester Yung.To contact the reporters on this story: Karlis Salna in Jakarta at email@example.com;Viriya Singgih in Jakarta at firstname.lastname@example.org;Arys Aditya in Jakarta at email@example.comTo contact the editors responsible for this story: Nasreen Seria at firstname.lastname@example.org, ;Thomas Kutty Abraham at email@example.com, Michael S. ArnoldFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.