Events that marked the week:
There were no data releases from Australia, on Monday, but from China Trade Balance figures were released. China’s exports remained sluggish last month, signaling tepid global demand, while deteriorating imports raise concern domestic conditions may be weakening anew. Overseas shipments fell 4.4 percent in U.S. dollars, rose 2.9 percent in yuan terms in July from a year earlier. Imports dropped 12.5 percent in dollar terms, slipped 5.7 percent in local currency. Trade surplus widened to $52.3 billion.
From Australia, on Tuesday,
NAB Business Confidence figures were released. The NAB Business Survey for the month of July provided a relatively consistent message on the health of the Australian economy, notes the Economics Team at NAB.
Business confidence came at 4 in July vs 6 in June, while business conditions saw a decline to 8 in July vs 12 in June. For a while now, the NAB Business Survey has provided a relatively consistent message on the health of the Australian economy. It continues to show a steady recovery in non-mining activity, with the services sectors clearly leading the way. But while the Survey points to a reasonably upbeat outlook for the near to medium-term, longer term risks are becoming increasingly apparent, particularly going into 2018 as resource exports start to level off and dwelling construction turns negative.
Also, from China CPI and PPI data was published. Chinese inflation weakened further in July, adding to the central bank’s recent calls for more “innovative” monetary policies that stress liquidity as opposed to further rate cuts. China’s consumer price index (CPI) came in at an annualized 1.8% in July after slowing to 1.9% in June, the National Bureau of Statistics said in a report on Tuesday. The reading was in line with the median estimate of economists. Compared to June, consumer inflation rose 0.2%. The People’s Bank of China (PBOC) targets annual inflation at around 3%.
Rising food costs supported inflation through the first half of the year, with CPI reaching a nearly two-year high of 2.3% in February. That level would be maintained for an additional two months before weakening again in May. Factory-gate prices declined for a 53rd consecutive month in annualized terms, government data showed on Tuesday. The producer price index (PPI) fell 1.7% in the 12 months through July. The rate of contraction in producer prices has eased in each of the past seven months, a sign that the worst of the manufacturing downturn had passed.
This week markets will be looking at:
Monetary Policy Meeting Minutes (Tuesday 3:30)
Wage Price Index (Wednesday 3:30)
Employment Change/Unemployment Change (Thursday 3:30)
