Data light week but with the current obsession with inflation the Chinese and Americans figures will make it an important one.
The USA core inflation is expected to show a decrease as energy prices have moderated but if it doesn’t then the nascent rally in stocks could be snuffed out.
The rally has been driven by hopes of a lessening of need for the FED to raise, however the US Non-Farm Payrolls issued on Friday were double expectations and showed hiring across the board so possibilities for a continuation of wage inflation remain.
The Chinese issued export figures over the weekend which showed faster growth than expected illustrating the winding back of COVID restrictions but fears for future world growth stir worries that this is temporary.
The market has one eye on the China / Taiwan situation which, after Chinese wargames in the South China sea and a potentially provocative Speaker of the House Nancy Pelosi visit to Taiwan, may well ramp up. If Taiwan becomes a “Ukraine” but in Asia then the world economic outlook would look very dark indeed.
The Bank of England raised by 50bps and then projected that the UK will enter recession in Q4 2022 lasting 5 quarters which a rise in rates is unlikely to help. They also raised its inflation forecast from 11% to 13.3% as an explanation for the rise.
Energy commodities continued to fall back, with oil at 6 month lows driven by investor apathy and residual fears of world recession. Whereas the metals world continues to crawl higher from lows without much reason.
Date | Country | Figures | Expected | Previous |
Aug 10 | China | Inflation Rate YoY | 2.5% |
|
| USA | Core Inflation Rate | 5.9% | 6.1% |
Aug 11 | USA | PPI MoM | 0.5% | 0.4% |
| USA | Initial Jobless Claims | 258K | 260K |
Aug 12 | GBP | GDP Growth Y0Y | 2.8% | 8.7% |
| GBP | Industrial Production YoY | 1.7% | 1.4% |
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