HSBC: AI hardware boom will continue to drive Asian PMI

HSBC's Chief Economist for Asia, Fan Limin, wrote in a report that the purchasing managers' index in most regions of Asia this week is expected to highlight the prosperity of the manufacturing sector, driven by the demand for AI hardware. He wrote that with the growth of the Asian AI hardware supply chain, the export data of major electronic product suppliers such as South Korea and Vietnam may show strong performance. He stated, however, that due to the lagged effects of earlier increases in energy and commodity prices this year, the inflation risks in most Asian regions still lean towards the upside. He said that in India, although lower oil prices have improved growth prospects, the threat of El Nio now looms over food prices and the informal sector. He added that despite this, the latest preliminary PMI data suggests that the Indian manufacturing sector should remain resilient.