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Analysts at Rabobank point out that today we saw Chinese CPI and PPI data for June, where the former edged up a tick to 1.9% y-o-y and the latter jumped to 4.7% y-o-y from 4.1% helped by low base effects.

Key Quotes

“On one hand a higher PPI print is welcome in that it relieves the immediate threat of a return to deflationary factory-gate pressure which is so painful for China’s supply-centric economy. However, the outlook is still for PPI to drift down again ahead into H2, and then those headaches will return just as trade tensions escalate.”

“Next up today it’s UK industrial production (consensus: 0.5%) and trade data, and then the German ZEW survey. That is likely to fall from 80.6 to 78.1 for current conditions and from -16.1 to -18.9 for expectations, and once again I’d suggest risks to the downside as it is analysts giving answers.”

In the US we have the NFIB small business survey, where answers are from real risk-takers, and the answers are likely to be much more positive, albeit edging down from 107.8 to 106.9. If we get a survey that shows no ill effect from trade wars so far, that’s certainly worth noting; and if we get ripples of fear from SMEs, so is that. Either way, we are going to learn something today.”

“In Canada we also have housing starts and building permits ahead of the BoC tomorrow.”