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China – better than expected. How unexpected

| Posted by: Paul Donovan | Tags: Paul Donovan

  • China's growth was better than officially expected.  This better data was announced in the middle of the Communist Party Congress. The question is whether it would ever be possible to announce worse-than-expected data in the middle of the Communist Party Congress. The issue for the future is how China slows credit and growth to a sustainable level.
  • A Congress in Europe, where EU leaders gather to hear the Dear Leader (Merkel), consult Macron's little red book of reforms, and ignore the island off the coast of the mainland that is talking about independence. Catalonia may get some attention, with the Spanish government deadline expiring today.
  • UK retail sales are due – the relative indifference of the consumer to the EU-UK UK-EU divorce process is one reason the Bank of England can take back the emergency rate hike. The UK ONS indicated that savings and income are better than previously thought, which places fewer constraints on consumption.
  • The US Federal Reserve Beige Book indicated labor shortages may slow recovery from recent natural disasters. Non-wage compensation is reported as increasing, but companies are tending to tighten profit margins rather than pass on the costs.