Follow Paul Donovan

Don't trust the data

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Chinese exports fell – or did they? With the RMB weakening, exporters had an incentive to under-invoice exports today in order to translate foreign currency revenues at a (presumed) more advantageous exchange rate in the future. So the data does not tell us that much.
  • Euro area GDP will be revised for the second quarter. We are looking for an economy growing around 1.25% in yoy terms, which for the Euro area is below trend but not that far below trend. A domestic bias to growth is looked for.
  • Japanese revised GDP growth fell less than feared (slightly less than feared). The decline in corporate investment in the domestic economy (as opposed to Japanese corporates investing overseas) was a notable area of weakness.
  • As the US stumbles back from its holiday weekend the afterglow of the employment report still pervades the markets. Kocherlakota of the Fed is on the calendar today. Markets need to grapple with rate hike prospects, quantitative policy prospects, and the path of future rate hikes (rhythm or data dependent?).