Edward Hayden-Briffett
Research Analyst, The Officials
Softer Dollar, Chinese Data Lands Below Consensus, Urban Unemployment Up
Softer US data eases Fed hike bets; China’s July growth misses across the board, with weak retail and property weighing.
Global markets start the week with a softer dollar and modestly richer US Treasuries as benign inflation and weak July retail sales reduce near-term Fed tightening expectations.
The Atlanta Fed’s Q3 GDPNow estimate was cut to 4.3% from 5.8%, while July FOMC minutes are the week’s main policy focus.
In the UK, August asking prices for housing on Rightmove fell 2% m/m and 1% y/y, while political pressure is building over bank taxation and labour-market policy.
For China, every major July print landed below consensus. Retail sales grew just 0.6% y/y (consensus 1.5%): big ticket items and property struggled with autos -17.0%, building materials -14.2%, furniture -8.8%, petroleum -7.6%. Small everyday spending held up: comms equipment +20.4%, cosmetics +6.8% and food +5.3%.
Urban unemployment rose to 5.2% from 5.0%, related to seasonal factors. Industrial production decelerated, up 4.5% y/y against the June print of 5.3%. Advanced manufacturing still carries the load (computers & comms +19.1%, shipbuilding +13.6%, special equipment +12.6%). New home prices fell 3.2% y/y, the 37th straight month in decline.
Copper is approaching record territory on tight near-term supply. AUD and NZD are firmer as the US dollar weakens. Risk sentiment in Asia remains broadly constructive.
Data today: Canada inflation, NY Empire State Manufacturing Index.
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