Chinese Positive Reports, Drop In Retail Sales, Waiting For European CPI
Aa
Share
Positive reports from Asia were delivered in the morning. Data from Great Britain show a deteriorating state of the economy. There will be also another inflation report, this time from the old continent.
China Industrial Production YoY
At 4:00 CET, China released a series of macroeconomic reports.
The most important is the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. The reading is positive. Industrial Production in the August reading was at the level of 4.2% and was higher than forecast (3.8%). The level from July was expected to remain unchanged. The last reading above 4% was in March (5.0%). Since then, the rate has been much lower. The current reading may show an improvement in the economy.
Source: investing.com
Chinese unemplyment rate
Another positive report from China concerns the unemployment rate. Unemployment in China has been in a downward trend since the second half of May. The current reading shows that the index has dropped back to 5.3%. This is a slight reduction compared to the previous reading (5.4%), but lower than expected. The percentage of the percentage of the total urban work force that is unemployed and actively seeking employment was forecast to be the same (5.4%).
Source: investing.com
Negative report from UK
At 8:00 CET, another UK retail sales report came in. Major Retail sales (MoM) fell to -1.6% in support. It was forecasted to be 9 bp from 0.4%. Core Retail Sales (MoM) also fell to -1.6%. YoY sales also fell to -5.4% from -3.2%. It was expected to fall to -4.2%. Such a large drop is taken as negative. Core Retail Sales YoY also plunged sharply from -3.1% to -5.0%.
We can expect that the current reading will negatively affect the situation of the pound (GBP).
European CPI
At 11:00 CET the European Union publishes its inflation report.
Today's European CPI data for August should remain unchanged - core CPI 4.3% YoY, main CPI 9.1% YoY.
Russia's interest rate
The Bank of Russia decision on short term interest rate is set at 12:30 CET.
On the last day of February, the Bank of Russia raised rates to 20%. And since April there have been reductions. Recently it was lowered from 9.50% to 8.00%. It is forecasted that there will be another 50 bp cut.
Source: investing.com
The Michigan sentiment index
At 16:00 CET, the University of Michigan publishes reports on inflation expectations and Consumer Expectations.
Index which includes two major components, a "current conditions" component and an "expectations" component was last read at level 58.0. The last reading was much higher, above 50.0. As of June, the index was between 45.0 and 50.0. If the current recovery is high it will be taken to be positive for the US dollar.
The current conditions component index is based on the answers to two standard questions and the expectations component index is based on three standard questions.
Source: investing.com
What will next week bring?
The market expects various events next week. We will be waiting for comments on RBA meeting at the beginning of the week. The most important event will be the decisions on interest rates taken by the Fed and the Bank of England. In addition, there will be reports on PMI in Great Britain and in Germany. Canada will publish inflation data and retail sales report. Weekly US reports such as crude oil inventories and initial jobless claims can be expected.
Summary
- 4:00 CET Chinese Unemployment Rate
- 4:00 CET Chinese Industrial Production
- 8:00 CET UK Retail Sales Reports
- 11:00 CET ECB’s CPI report
- 12:30 CET Russia interest rate
- 16:00 CET The Michigan sentiment index
Source: https://www.investing.com/economic-calendar/
