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Fundamentals
The UK’s quarterly GDP growth came in as expected at 0.3% but was negated somewhat by a wider than expected trade balance which blew out to -£9.6b missing estimates of -£4.5b.
Japanese consumer confidence and household confidence notched up moderate increases to 43.6 and 43.5 respectively. Industrial production also rose to 20.4% from 20.2% in the previous period.
The UK consumer price index came in at 3.2% year-on-year which was a moderate drop from the 3.4% previously but still higher than the 3.1% expected.
In New Zealand, retail sales came in at 0.4% softer than the 0.5% indicating that the fledgling recovery is struggling to take hold. CPI also came in on the softer side at 1.8% in the second quarter, less than the 1.9% expected and a sizeable drop from 2.0% previously.
The UK unemployment rate dropped unexpectedly to 7.8% from 7.9% as jobless claims fell by 20,800 marginally beating expectations for a drop of 20K.
In the Euro-zone CPI came in unchanged at 1.4% and industrial production came in weaker than expected, leading us to believe the the ECB will maintain its ultra-loose monetary policy for some time longer.
US retail sales slid by 0.5% far more than the 0.1% drop expected, indicating that consumers are still wary of spending and are likely saving more.
The Fed. released the minutes from its latest meeting where it took on a far more dovish approach of the economy suggesting it could takes years to heal the economy, downgrading their outlook on both growth and the jobs market.
China released its quarterly growth and inflation data which came in softer than expected but still showed solid growth. The Chinese economy grew at a rate of 10.3% in the second quarter, a tad slower than the 10.5% expected and CPI moderated to 2.9% from 3.1% in the first quarter, lower than the expected 3.3%.
US producer price index slipped to a 2.8% expansion, significantly less than the 3.1% expected and the 5.3% expansion seen in the previous period.
The US consumer price index rose only 1.1% year-on-year to June sliding from the 2.0% rise in May and missing expectations of 1.2%.
The University of Michigan consumer confidence index slumped to 66.5 in July, a steep drop from the 76.0 in June and much lower than the 74.0 expected.
The Week Ahead
A quiet day Monday as some Asia markets are closed for a public holiday and the economic calender is relatively empty. Early Tuesday the RBA releases its minutes from its latest policy meeting, which is followed later in the day by German producer prices and some UK public finance data. The Bank of Canada’s interest rate decision comes early Wednesday, the BoC is expected to hike rates 25bp to 0.75%. Later in the day the Bank of England releases its minutes from its latest MPC meeting, this will be closely watched to see how the members voted, while it is widely expected to be a 7-1 vote a 6-2 could indicate a slow shift in policy. This relatively light week for economic releases comes ahead of Friday’s jam-packed calender, the real market moving release is the ECB’s bank stress-test results. Also due is UK Q2 GDP, Canadian CPI and the German IFO.
The UK’s quarterly GDP growth came in as expected at 0.3% but was negated somewhat by a wider than expected trade balance which blew out to -£9.6b missing estimates of -£4.5b.
Japanese consumer confidence and household confidence notched up moderate increases to 43.6 and 43.5 respectively. Industrial production also rose to 20.4% from 20.2% in the previous period.
The UK consumer price index came in at 3.2% year-on-year which was a moderate drop from the 3.4% previously but still higher than the 3.1% expected.
In New Zealand, retail sales came in at 0.4% softer than the 0.5% indicating that the fledgling recovery is struggling to take hold. CPI also came in on the softer side at 1.8% in the second quarter, less than the 1.9% expected and a sizeable drop from 2.0% previously.
The UK unemployment rate dropped unexpectedly to 7.8% from 7.9% as jobless claims fell by 20,800 marginally beating expectations for a drop of 20K.
In the Euro-zone CPI came in unchanged at 1.4% and industrial production came in weaker than expected, leading us to believe the the ECB will maintain its ultra-loose monetary policy for some time longer.
US retail sales slid by 0.5% far more than the 0.1% drop expected, indicating that consumers are still wary of spending and are likely saving more.
The Fed. released the minutes from its latest meeting where it took on a far more dovish approach of the economy suggesting it could takes years to heal the economy, downgrading their outlook on both growth and the jobs market.
China released its quarterly growth and inflation data which came in softer than expected but still showed solid growth. The Chinese economy grew at a rate of 10.3% in the second quarter, a tad slower than the 10.5% expected and CPI moderated to 2.9% from 3.1% in the first quarter, lower than the expected 3.3%.
US producer price index slipped to a 2.8% expansion, significantly less than the 3.1% expected and the 5.3% expansion seen in the previous period.
The US consumer price index rose only 1.1% year-on-year to June sliding from the 2.0% rise in May and missing expectations of 1.2%.
The University of Michigan consumer confidence index slumped to 66.5 in July, a steep drop from the 76.0 in June and much lower than the 74.0 expected.
The Week Ahead
A quiet day Monday as some Asia markets are closed for a public holiday and the economic calender is relatively empty. Early Tuesday the RBA releases its minutes from its latest policy meeting, which is followed later in the day by German producer prices and some UK public finance data. The Bank of Canada’s interest rate decision comes early Wednesday, the BoC is expected to hike rates 25bp to 0.75%. Later in the day the Bank of England releases its minutes from its latest MPC meeting, this will be closely watched to see how the members voted, while it is widely expected to be a 7-1 vote a 6-2 could indicate a slow shift in policy. This relatively light week for economic releases comes ahead of Friday’s jam-packed calender, the real market moving release is the ECB’s bank stress-test results. Also due is UK Q2 GDP, Canadian CPI and the German IFO.
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