Macro conditions have generally stabilized across APAC relative to January's low point, which was characterized by elevated financial market volatility, falling commodity prices and declining global trade which many regional markets depend on to support activity and jobs. Importantly, high frequency economic data for China has surprised on the upside in recent months. In particular, manufacturing, exports and housing – key sectors that have weighed on activity in recent quarters – are showing signs of stabilizing on account of further monetary easing and renewed government efforts to stimulate activity. This fiscal stimulus includes increased financing of infrastructure spending and widening of the budget deficit for this year via corporate tax cuts and unemployment benefits for workers laid-off during China's shift to services sector led growth.
Source : UBS AG