Daily update
Daily update
- China reported stronger industrial production and weaker domestic retail sales. If these figures are accurate, they present some risks to China’s policy-makers. Production strength seemed focused in politically-sensitive areas, including computing and autos.
- Reporting stronger industrial production data helps China hit the official growth target for this year (traditionally important). But if the growth target is met through production without domestic consumption, China becomes vulnerable to trade reprisals in a climate of rising economic nationalism. Whether or not foreign accusations of unfair trade practices are accurate is not relevant—with prejudice politics on the increase around the world, it is the presentation of policy that matters, not its effectiveness.
- Europe releases final Eurozone consumer price inflation data for April—a non-event for markets. The final figure is rarely altered, and we already have national data. The only notable point is that at 2.4%, Europe’s April inflation exactly matches the March US harmonized consumer price inflation number.
- Schnabel of the ECB has suggested that rates should not be cut this summer. Markets are likely to ignore them as investors seem relatively certain on policy direction. Today’s Federal Reserve speakers do not cover market sensitive topics, leaving the Bank of England’s Mann as the most likely investor focus.
