In today’s briefing:
- 5 Things We Watch – Fed, BoE, Energy, GDI/GDP & BoJ
- CX Daily: China’s New Electricity Spot Market Rules Lay Groundwork for Unified Standard
- Fed Nugget: Why the Fed dot plot will remain hawkish
- UK: Flying Low in Augusts
- CX Daily: China’s Trillion-Dollar Local Government ‘Hidden Debt’ Dilemma
5 Things We Watch – Fed, BoE, Energy, GDI/GDP & BoJ
- It’s Central Bank bonanza once again, and that of course means that we will take you through the biggest central bank meetings and give you our take on them, as well as provide you with other observations of relevance for the time to come.
- This week we are watching out for the following 5 topics within global macro: FOMC Meeting later today, BoE meeting tomorrow, Crude prices and the energy trade, the growing difference between GDI and GDP and BoJ
- First it was a pause, then we got a hike and now it looks like we are back at pause with the market having priced in another 11 bps coming at the end of the year.
CX Daily: China’s New Electricity Spot Market Rules Lay Groundwork for Unified Standard
Analysis: China’s new electricity spot market rules lay groundwork for unified standard
Tornadoes / Tornadoes kill 10 in coastal Chinese province
Shenzhen looks to attract more Hong Kong, Macao visitors — and their cash
Fed Nugget: Why the Fed dot plot will remain hawkish
- It is time for the FOMC meeting this afternoon/evening depending on your location and we see a high probability of the FOMC solidifying that another hike is coming in November or December, which is not the base case for markets currently (accumulative 11bps priced in for the rest of the year by the time of writing).
- Let’s have a look at three simple chart studies on the developments in 1) Growth, 2) Inflation, and 3) Labour since the June dot plot that will be updated later.
- Both Services and Manufacturing have clearly surprised the UPSIDE since the June meeting and all sell-side economists have been busy revising up growth forecasts.
UK: Flying Low in Augusts
- UK inflation shocked expectations by falling to 6.7% on the CPI and 9.1% on the RPI. An unseasonable summer fall in airfares was partly to blame, but pressure broadly eased.
- The underlying inflationary impulse was close to target for the first time in 2yrs. Some positive payback is likely in September, including in services inflation.
- Prices are tracking under the BoE’s August MPR forecast, but wages are running hotter, which creates pressure later, so the BoE remains likely to hike in September.
CX Daily: China’s Trillion-Dollar Local Government ‘Hidden Debt’ Dilemma
In Depth: China’s trillion-dollar local government ‘hidden debt’ dilemma
Corporate America is losing optimism over China, AmCham survey shows
China expands use of digital yuan to covering utility bills
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