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The Chinese are alright

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  • That most reliable of economic data sources, China, has reported slightly stronger than expected GDP, and stronger than expected industrial production data. So clearly there cannot be anything wrong in the world economy. Markets have reacted accordingly.
  • The Reserve Bank of Australia minutes, which were monumentally dull, did acknowledge that the Chinese had room to stimulate their economy if necessary; a moderately important notion for the Australian economy.
  • The Euro area has no data, leaving investors to contemplate the ways in which the ECB might seek to increase the effectiveness of quantitative policy easing at a time when there is an expectation for regulatory tightening. The UK offers government borrowing data.
  • US existing home sales data make a somewhat forlorn and lonely appearance on the data calendar - we are looking for future household formation to focus on renting rather than buying. Weekly store sales data may attract more attention than normal, given the focus on the robustness of the US consumer.

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