- Chinese industrial production drop worries markets
- Big week for Sterling ahead
By David Johnson
Whilst football thuggery is a well-documented phenomenon, the violence in Paris following the French team’s success at the World Cup had nothing to do with football. I can say this confidently because the 30 or so criminals who broke into stores along the Champs Elysees wore ski masks. ‘Going equipped’ is the expression the police use and taking a ski mask to watch football in 27 degree heat is a bit of a giveaway methinks.
US Dollar weaker today
US consumer confidence slipped in July. Many are citing concerns over tariffs between the US and China, EU and NAFTA members. Whether that is accurate, I don’t know, but the global economy doesn’t benefit from that kind of fighting talk, of that there is no doubt. The USD is a tad weaker this morning. Today’s data includes little more than retail sales and business inventories. The forecasts are not positive for either, so further weakness in the US Dollar could be on the cards.
Chinese growth slows
We heard overnight that Chinese economic growth was in line with expectations for the second quarter of the year, but industrial production slowed much faster than expectations in June. The 6.0% reading against last month’s 6.7% and the general forecast of 6.5% was a bit of a shock. China’s production is a bellwether for demand from other countries, so that is not a good sign for the global economy.
Important week for the Pound
This is a big week for the Pound; not only will there be a lot of Brexit-vexation or ‘brexation’ (let’s make that a thing, shall we) but we will get inflation (which is likely to have picked up) and retail sales (where the opposite is forecast). Add in the odd and unexpected tosh and nonsense from politicos and central bankers and it is likely to be pretty lively. Sterling starts this week at just over €1.13 and around $1.32. Mid-range-ish, then.
Euro awaits more interesting news…
Eurozone data is thin on the ground this week but I guess inflation is the big one. The markets are expecting a 2.0% reading, so anything above or below will be interesting. The Euro is, like the Pound, sitting in the middle of its recent ranges, desperately awaiting something interesting.
Key Australian and New Zealand data expected
Australasian data comes in two main forms this week. Overnight tonight, New Zealand’s Q2 inflation is expected to be in line with the Q1 reading of 0.5% growth. From Australia, we’ll get the minutes from the last Reserve Bank meeting and some employment data on Thursday.
Canadian Dollar could see movement
Canadian data is expected to buck the trend this week. Consumer inflation is expected to be unchanged from last month but the markets are expecting a rebound in retail sales from last month’s small scale contraction. The Canadian Dollar may be quiet until Thursday, but traders and analysts will be assessing that data against the decision by the Bank of Canada (BoC) to raise the base rate to 1.5% at their last meeting. The BoC’s Governor has offered the sensible advice that, if you can’t afford the home you want, buy something smaller. Gee, thanks. That’s why he gets paid the big bucks.
And last week, we had further evidence that Elon Musk believes he is Tony Stark. Hurriedly building a mini submarine to try to rescue the Thai football team trapped in a flooded cave without any concept of the nature of underground caves is like… oh I don’t know… tweeting that your company had gone bankrupt on 1st April when many believed the company had a good chance of going bankrupt. Ill-conceived is the theme, maybe.