Posted Aug 24, 2021 by Martin Armstrong
China released economic data for July that showed slower-than-expected growth as the world’s second-largest economy battled floods and a resurgence of Covid-19. The slowdown was particularly apparent in individual Chinese consumer spending, despite authorities’ efforts to build up consumption as a driver of economic growth. The data showed consumers cut back on spending across the board, whether it was on big-ticket items like cars or lower-cost products like cosmetics that can be bought through online e-commerce platforms. Retail sales rose by 8.5% in July from a year ago, lower than the forecast 11.5%, according to analysts polled by Reuters. Auto-related sales, the largest component of retail sales by value, was the only category to decline in July, down 1.8% year-on-year.
India’s government launched the National Monetisation Programme (NMP) on Monday, listing out the government’s infrastructure assets to be sold over the next four-years. The planned sales are in line with Prime Minister Narendra Modi’s strategic divestment policy, under which the state will retain a presence in only a few identified sectors with the rest privatized. Infra assets worth USD 92 billion across rail, road, power sectors will be monetized over four years.
The major Asian stock markets had a green day today:
- NIKKEI 225 increased 237.86 points or 0.87% to 27,732.10
- Shanghai increased 37.34 points or 1.07% to 3,514.47
- Hang Seng increased 618.33 or 2.46% to 25,727.92
- ASX 200 increased 13.10 points or 0.17% to 7,503.00
- Kospi increased 48.09 points or 1.56% to 3,138.30
- SENSEX increased 403.19 points or 0.73% to 55,958.98
- Nifty50 increased 128.15 points or 0.78% to 16,624.60
The major Asian currency markets had a mixed day today:
- AUDUSD increased 0.00415 or 0.58% to 0.72523
- NZDUSD increased 0.00476 or 0.69% to 0.69431
- USDJPY increased 0.03 or 0.03% to 109.70
- USDCNY decreased 0.00398 or -0.06% to 6.47395
- Gold increased 0.27 USD/t oz. or 0.02% to 1,805.47
- Silver increased 0.236 USD/t. oz or 1.00% to 23.896
Some economic news from last night:
Consumer Confidence (Aug) decreased from 103.2 to 102.5
Core Retail Sales (QoQ) decreased from 3.5% to 3.4%
Retail Sales (QoQ) (Q2) increased from 2.8% to 3.3%
Retail Sales Quarterly Vs. Year Ago (Q2) increased from 6.6% to 33.3%
Some economic news from today:
BoJ Core CPI (YoY) increased from 0.1% to 0.2%
The UK’s economic recovery stumbled in August as companies faced labor and supply shortages and rising COVID-19 case numbers deterred consumers, according to a closely-watched business survey. The IHS Markit/CIPS Flash UK Composite PMI – an early indicator of economic health – gave a reading of 55.3 for August – the lowest since February and down from last month’s 59.2. Britain’s economy grew by a robust 4.8% in the second quarter of the year but remained more than 4% smaller than before the pandemic.
European Central Bank President Christine Lagarde said that rates wouldn’t rise until inflation of 2% comes sustainably into sight. The shift in forward guidance carries even more weight now that a surge in coronavirus cases threatens the recovery from the pandemic. The market move is particularly jarring considering that, in December, a 10-basis-point cut was priced in for early 2022 — a sign of how engrossed the market became with the prospect of an economic rebound. The central bank is likely to wait “more than the good three years that are currently discounted in the Eonia curve,” before it raises borrowing costs, Commerzbank’s Rieger said.
The major Europe stock markets had a mixed day:
- CAC 40 decreased 18.79 points or -0.28% to 6,664.31
- FTSE 100 increased 16.76 points or 0.24% to 7,125.78
- DAX 30 increased 53.06 points or 0.33% to 15,905.85
The major Europe currency markets had a mixed day today:
- EURUSD decreased 0.00005 or 0.00% to 1.17437
- GBPUSD increased 0.00026 or 0.02% to 1.37260
- USDCHF increased 0.00139 or 0.15% to 0.91367
Some economic news from Europe today:
CBI Distributive Trades Survey (Aug) increased from 23 to 60
German GDP (YoY) (Q2) increased from -3.4% to 9.8%
German GDP (QoQ) (Q2) increased from -1.8% to 1.6%
The home-buying frenzy in the US continued in July after sales of existing homes gained 2% momentum, according to the National Association of Realtors. Home sales were up 1.5% YoY, despite the prices of homes increasing 17.8% YoY to $359,900. The increased price has many priced out of the market, with first-time buyers representing only 30% of transactions compared to the previous average of 40%. The average single-family home lasts only 17 days on the market, and an increasing number of buyers are paying in cash.
In addition to the growing cost of homes across the US, the average price of rent has increased as well. According to Zillow, renters in 33 of the country’s 55 largest metro areas pay more in monthly rental payments than those paying off mortgages.
According to a CNBC report, Coinbase is coming under intense scrutiny after thousands of users filed complaints. Numerous users reportedly had their accounts hacked and drained of all funds. The platform hosts more than 68 million users but many have cited inadequate customer service. The news comes one week after the SEC announced that they would crackdown on cryptocurrencies if they felt fraud was becoming commonplace in unsecured cryptocurrencies. Some are now wondering if this could be the opening for the US government to become involved in regulated cryptocurrencies, which were designed for the opposite purpose.
US Market Closings:
- Dow advanced 30.55 points or 0.09% to 35,366.26
- S&P 500 advanced 6.7 points or 0.15% to 4,486.23
- Nasdaq advanced 77.15 points or 0.52% to 15,019.8
- Russell 2000 advanced 22.61 points or 1.02% to 2,230.91
Canada Market Closings:
- TSX Composite advanced 70.5 points or 0.34% to 20,547.76
- TSX 60 advanced 3.23 points or 0.26% to 1,233.6
Brazil Market Closing:
- Bovespa advanced 2,739.08 points or 2.33% to 120,210.75
The oil markets had a mixed day today:
- Crude Oil increased 1.98 USD/BBL or 3.02% to 67.6200
- Brent increased 2.31 USD/BBL or 3.36% to 71.0600
- Natural gas decreased 0.047 USD/MMBtu or -1.19% to 3.8980
- Gasoline increased 0.0582 USD/GAL or 2.74% to 2.1814
- Heating oil increased 0.0634 USD/GAL or 3.16% to 2.0685
The above data was collected around 14:12 EST on Tuesday
- Top commodity gainers: Orange Juice (3.54%) and Brent (3.36%), Heating Oil (3.16%) and Soybeans (3.28 %)
- Top commodity losers: Cotton (-1.03%), Lumber (-4.57%), Natural Gas (-1.19%), and Lean Hogs (-0.69%)
The above data was collected around 14:15 EST on Tuesday.
Japan 0.019%(+0bp), US 2’s 0.22%(-0.002%), US 10’s 1.2851%(+3.18bps); US 30’s 1.90%(+0.0030%),Bunds -0.4740% (+0.4bp), France -0.1260% (+0.4bp), Italy 0.5735% (-1bp), Turkey 16.78% (-3bp), Greece 0.5740% (-1bp), Portugal 0.136% (+1bp); Spain 0.254% (+8.76bp) and UK Gilts 0.5470% (+1bp).