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MarketPulse - The Beat of the Global Markets - Economy
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British GDP slows to 0%, pound edges lower
The UK economy continues to soften as GDP fell to 0% in July, matching the market estimate. This supports the BoE lowering rates but this has become difficult as inflation has been moving higher and is expected to hit 4% in September, double the 2% target. US unemployment claims jumped to 263 thousand, the highest number since October 2021.
Markets look for rate clues from RBNZ's Hawkesby, US PPI contracts
RBNZ Governor Hawkesby will discuss the August monetary statement and investors will be looking for clues about future rate policy. In the US, PPI and core PPI contracted and missed expectations. The US releases a key CPI report on Thursday.
The ECB is unlikely to change rates in the near future
ECB likely to hold rates at a 2% deposit; markets price no move. Inflation is nearer target and expectations ticked up to 2.5%, so the path may be revised slightly higher on energy. Activity is improving—composite PMI 51.0 and manufacturing above 50—signaling modest recovery. Q3 GDP may be nudged up; core inflation still converging to 2%. Baseline: keep policy on hold this year while monitoring data.
Aussie eyes Australian inflation expectations, Aussie higher
Australia will release inflation expectations on Thursday, with a market estimate of 3.9%, unchanged from the previous release. China continues to struggle with deflation, as CPI and PPI both declined in August. In the US, CPI is expected to rise to 2.9% from 2.7% and core CPI is projected to remain unchanged at 3.1%.
New zealand manufacturing sales slide, kiwi edges lower
New Zealand manufacturing sales fell 3% in the second quarter, a sharp reversal from the 4.8% gain in Q1 and well below expectations. The Fed meets next week and the weak NFP reports has raised a slight possibility of a jumbo half-point rate cut.
Canada and US post weak job numbers, Canadian dollar steady
Canada's employment report pointed to a deteriorating labor market. Employment fell by 66 thousand and the unemployment rate rose to 7.1%. In the US, nonfam payrolls dropped to 22 thousand, down from a revised 79 thousand and missing the market estimate of 75 thousand.
UK retail sales beat estimate, US nonfarm payrolls sink, pound jumps
UK retail sales improved in July but the cup was only half full as the June figure was revised sharply lower. In the US, nonfarm payrolls slipped to 22 thousand, down from 79 thousand and well short of the market estimate of 75 thousand.
Canadian dollar eyess Canadian US job reports
It could be a busy day for the Canadian dollar, with the release of US and Canadian employment reports. Canada's economy is expected to add 7.5 thousand jobs after a huge loss of 40.8 thousand in July. In the US, nonfarm payrolls are expected at 75 thousand, almost unchanged from 73 thousand in July.