Daily update
Daily update
- China has announced a fiscal stimulus, increasing the deficit limit from 3% to 3.8% of GDP. The money is focused on infrastructure spending. China was expected to meet this year’s growth target of around 5%. The rush to stimulate at this point in the year suggests concern about growth momentum in 2024, or a worry that living standard reality is not as good as the reported GDP figures imply.
- The German ifo business sentiment opinion poll is due. As with yesterday’s sentiment surveys, there has been a tendency for business sentiment to underreport economic reality. The UK’s Office for National Statistics has started changing data methods because survey response rates are too low, and some US data has fewer than half those surveyed replying. This highlights a general concern about survey data quality.
- Spanish producer price data is due, and ECB President Lagarde is of course scheduled to speak. Neither event seems likely to move markets.
- The US House of Representatives farce (or attempt to elect a speaker) continues. Yesterday morning’s candidate for speaker was effectively vetoed by former US President Trump, and yesterday afternoon’s candidate for speaker is going to try and get sufficient support today. Investors will not tolerate legislative paralysis indefinitely.
