Chinese economic data confirms the post-Covid recovery continues, but not at the pace expected. Chinese GDP growth for Q2 was expected to rise to 7.3%, but only came in at 6.3%, while Industrial Production jumped 4.4%. Retail Sales were also lower than expected, an increase of 3.1%, which is all relatively positive but disappointing. Economic conditions remain recessionary in Europe, as the ECB tightens monetary policy to quell inflation, which appears to be succeeding, as Italy latest inflation data confirms the cooling. US Empire State Manufacturing Index was better than expected and positive, confirming improving economic conditions. US equities opened the week strongly, following a week of gains, from the previous trading week. The US Dollar was steady, with the EUR holding above 1.1200, while the GBP dipped back below 1.3100.
Chinese data was not great news for commodity currencies, as the NZD slipped back to 0.6310, while the AUD drifted back to 0.6800. NZ Services PSI and Composite PCI were both very weak and confirms the recent trend of recessionary economic data. Markets will turn their attention to the US Consumer and the latest Retail Sales report, while RBA minutes may interest a very few. The new Governor of the RBA will probably be hoping inflation has peaked and further unpopular rate rises are not necessary.
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