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Looking for global growth signals

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  • The US employment report has sown confusion about the economic and policy outlook. We believe there was enough strength in the report to allow the Fed to scale back its bond buying program, but the uncertainty may lead to some moderation in the way this is done.
  • Chinese data showed stronger exports �€“ and despite the supposed improvements in the quality of the data we would argue that the strength is better than the headline suggested. Even Europe managed to purchase more Chinese product.
  • Japanese Q2 GDP was revised up as expected (a mix of nominal growth and a lower price deflator). Capital spending was doing better. PM Abe is sure hosting the 2020 Olympics will be a big boost to growth; the precedent of almost all previous Olympiads is rather against him.
  • Australia's Federal election has resulted in a change of government, with Abbot's coalition winning with a clear margin (though the Senate may be an obstacle to legislation). Meanwhile in the UK BoE dove Fisher seems to be backing away from his calls for more quantitative policy.

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