- Canada's fin min: Russia's war on Ukraine the biggest threat to the global economy now
- China statistics authority says downward pressure on economy increased substantially in Q2
- China June retail sales, industrial production data up from May
- China Q2 GDP -2.6% q/q (vs. expected -1.5%)
- China new home prce data from June shows barely changed
- PBOC issues 100bn yuan 1 year MLF at 2.85% (unchanged rate, as expected)
- PBOC sets USD/ CNY mid-point today at 6.7503 (vs. estimate at 6.7506)
- China's foreign minister says willing to recalibrate relations with Australia
- Goldman Sachs still bullish oil - adverse scenario, Brent’fair value $120-110 in 2H22-2023
- AUD/USD forecast for a range month ahead then higher in 3 month horizon
- ICYMI - Rumour of China reversing its ban on Australian coal
- US President Biden will meet with Saudi Prince Friday
- Europe gas recap: Risk Russia flows curbed further remains high, EU has very few options
- Goldman Sachs preview a rate hike from the European Central Bank next week
- Tech stocks are the new Energy stocks
- Japan PM Kishida orders 9 nuclear power plants to be brought back on line, stat
- New Zealand Manufacturing PMI for June: 49.7 (vs. prior 52.9)
- Italy leadership update - Italian President rejects Draghi resignation
- The RBNZ have confirmed monetary policy meeting, Statement, & Review dates for 2023
- South Korea terms of trade (June): Export prices +23.7% and Imports prices +36.5% y/y
- Forexlive Americas FX news wrap 14 Jul
- ICYMI - Fed's Bullard and Waller are both leaning to +75bp and away from +100bp in July
- Trade ideas thread - Friday, 15 July 2022
- IYCMI - Reports of Chinese homebuyers stop making mortgage payments on unfinished projects
- Dow and S&P extend losing streak to 5 days
The focus for the session was on China. We had a key interest rate setting event:
- the maturing 1-year Medium-term Lending Facility was rolled over, 100bn yuan at an unchanged rate of 2.85%
- the unchanged MLF rate is a strong indication that next week’s (Wednesday 20 July) one- and five-year Loan Prime Rate (LPR) settings will also be unchanged (1-year is 3.7%, 5-year is 4.45%)
On the economic data agenda we had Q2 GDP:
- the economy contracted q/q in Q2 (see points above for the q/q and y/y GDP data), the downturn came amidst the extended lockdowns in Shanghai and other cities to fight virus outbreaks
We also had June activity data, which, unsurprisingly, showed a bounce back for the economy:
- industrial output and retail sales both recovered from the previous month (see bullets above)
An interesting item was from New Zealand, where the manufacturing PMI dropped into contraction for the first time since August of 2021. No one outside of New Zealand pays a lot of attention to the NZ PMIs but I’d highlight this result as a heads up to what is likely to be ahead for other economies. The Reserve Bank of New Zealand was a leader in interest rate hikes amongst DM central banks globally, in their fight against inflation. A key feature, not a bug, of tightening interest rates to fight inflation is to take the heat out of the economy. The difficult part is not taking too much heat out and forcing the economy into recession. The NZ economy is slowing, but is not in recessionary territory. But the RBNZ will be eyeing the risk ahead as it continues on its rate hike path. Other DM central banks will soon be in the same boat.
FX rates were little net changed during the session.
Oil is up just a touch.
Equities in the region are mixed.
Oil:
