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10 Aug: After employment

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Fed speakers will keep alive the afterglow of the US employment report. The report was enough to generate a September hike (we have another employment report before the September FOMC). Fischer and Lockhart both speak today – the former in a TV interview.
  • There are media reports that China has sold $180bn of US Treasuries. Great for sensationalism, not so good for sound economics, as the reports use the TICs data. China might have sold. More likely it has shifted funds to external managers, or used reserves to recapitalise banks (neither results in a reduction of Chinese Treasury holdings).
  • Chinese consumer price inflation did pick up last month, to 1.6% yoy, on soaring pork prices. Does this matter? No. China does not export food, so this is not a global issue. In past periods of porcine price pressures, Chinese consumers have sensibly switched to other meats, meaning the real disposable income consequence is limited.
  • Japanese consumer confidence figures moderated. Confidence data always needs to be treated with caution, but there is a tie between confidence data and the government approval rating, and a tie between the government approval rating and the government's ability to pass legislation.