"Asia will still be a stronger part of the world than the U.S. or Europe but compared to people's expectations Asia is likely to come in a little bit lower than expected and Europe and the U.S. are probably set to surprise a little bit on the upside," he said.
Developing Asia will grow 6.9 percent in 2013, the IMF said in July, cutting its forecast by 0.3 percentage point. That compares with a global expansion forecast of 3.1 percent and projected growth of 1.2 percent in advanced economies.
Investors will be scanning data from Chinese factories to Malaysian growth this week for further signs of weakness.
An Aug. 22 flash reading for China on a manufacturing purchasing managers' index by HSBC Holdings Plc and Markit Economics is expected to come in at 48.1 for August, from 47.7 in July, according to the median economist estimate compiled by Bloomberg. A reading below 50 indicates contraction.
Malaysia's central bank on Aug. 21 may post data showing 4.7 percent economic growth in the second quarter from a year earlier, after rising 4.1 percent in the January-March period, its slowest rate since September 2009, according to the median estimate of economists in a Bloomberg survey.
Pressure to raise interest rates to support currencies would hit consumers in countries such as in the 10-member Association of Southeast Asian Nations, where cheap mortgages and easy credit have fueled housing booms.
"Southeast Asian consumers have taken on much higher debt in the last few years," Royal Bank of Scotland Group Plc analyst Sanjay Mathur wrote in a July 18 report. He said the largest increase was in Malaysia, where household debt increased by 20 percent of GDP between 2008 and 2012.
There's a feeling that "the rest of the world's getting a bit better and Asean's had its sort of burst of credit-enhanced growth," said Edward Teather, an economist at UBS AG who covers Southeast Asian markets from Singapore. "It's raining already."
David Fuller's view We certainly have nervous stock market conditions
which Fullermoney has been predicting for several months.
This is causing rotational swings as investors attempt to move out of
overbought sectors, including ASEAN markets such as Indonesia,
Thailand and The
Philippines, where there are now some growth and / or currency concerns.
Money has flowed backed to Western markets, not least Europe
in the last two months where valuations have been relatively cheap and economic
prospects appear somewhat less dire, at least for the Central and Northern countries.
However, these markets are now overbought in the short term.
Overall, Fullermoney maintains that previously leading stock markets such as the MSCI Asia Pacific sector, which became increasingly expensive earlier this year, have moved from the overall bullish environment into a choppy, ranging phase which could persist for the lengthy medium term.
However, monetary policy remains generally bullish, despite rises in long-dated government bond yields which are now in a bear market. In a typical late-in-the-cycle development, momentum moves are underway in less politically challenged Middle Eastern markets such as Saudi Arabia and Qatar. However, watch out for eventual downward dynamics signalling mean reversion towards their 200-day MAs, as these are now overextended.
(See also Eoin's assessment of ASEAN markets on 29th July and my short comment on 11th July.)