The Great US Consumer and the Great Chinese Consumer
- US retail sales loom large on the horizon, and this month we are looking for some strength after disappointing data in earlier months. Higher gasoline prices, better auto sales and better underlying demand come together. It is worth noting that yesterday saw some especially strong wage data in the US.
- Greece. We must steel ourselves examine the babble of noise, because noise (not anything of substance) is impacting markets. There are reports that Germany may accept staggered reform from Greece – a positive sign, as a willingness to compromise perhaps suggests that the German government realises the consequences of failing to agree a deal.
- Korea cut rates – earlier than we had expected, with the economic threat from the MERs virus seemingly bringing this forward. The question is whether the BoK will see the need to cut further in the second half. New Zealand's Reserve Bank also unexpectedly eased and seems likely to ease again.
- China's industrial production and retail sales data were in line with expectations. The strength of retail sales is supportive of the idea that China is transitioning towards more consumer led growth, and potentially becoming more integrated in the world economy as a result.