Making things and selling things

Posted by: Paul Donovan

14 Jul 2020

Daily update

  • Chinese exports and imports both rose in year-on-year terms in June, exports helped by medical supplies. Trade is likely to lag consumer spending. US and European consumers are emerging from lockdown with cash to spend, but that is likely to mean lower inventories first, more trade later. US-China tensions increased again, but markets are unlikely to be seriously threatened as the phase one trade deal is not seen being damaged.
  • UK May industrial and manufacturing production both rose on the month (the consensus ranges remain impossibly wide for such data). The May manufacturing PMI business sentiment opinion poll had signalled a terrible, terrible month-on-month contraction. The reality was the second strongest month-on-month increase in history.
  • The German ZEW business sentiment survey is due. With consensus ranges as wide as they are on economic data, a survey of economists may lack the pinpoint precision one normally associates with the economics profession.
  • US consumer price inflation for June is mildly interesting. Data quality remains an issue, with a bias to underestimate inflation. This will fade over time, and the error margin is likely to be quite small. Generally, the US remains in a disinflation environment with quite a lot of relative price changes.

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