In one line: China’s TSF data suggest weak demand for loans in the real economy
Kelvin Lam (Senior China+ Economist)China+
- Japan’s Q2 GDP surprised to the upside; economic recovery is on a firmer footing than expected.
- Consumption ended four consecutive quarterly falls in Q2 on the back of first real wage gains since 2022.
- The BoJ is delighted to see more evidence of wage-price spiral; it provided the basis for July’s hike.
Kelvin Lam (Senior China+ Economist)China+
- July activity data was unspectacular, with slowing growth in FAI and production and weak retail sales.
- China's fixed investment growth fell unexpectedly, with infrastructure investment the main drag.
- FAI growth would have been weaker without the contribution from equipment replacement plan.
Kelvin Lam (Senior China+ Economist)China+
- China's total social financing growth ticked up in July, but credit demand remained very weak.
- Net new loans fell for first time in 19 years, with notable weakness in household and business lending.
- The PBoC are trying hard to raise long-term bond yields, but we will wait to see if that can be sustained.
Kelvin Lam (Senior China+ Economist)China+
Producer deflation set for only modest improvement in H2
Duncan WrigleyChina+
China's consumer inflation buoyed by seasonal food inflation, rather than demand
Producer deflation extends decline amid oversupply
Duncan WrigleyChina+
- China’s headline consumer inflation rose in July, but this was due to weather-related food inflation.
- Domestic demand still looks sluggish, based on core consumer inflation.
- A jump in auto trade-in subsidy applications, despite overall falling sales, offers a ray of hope for H2.
Duncan WrigleyChina+
In one line: China's July exports disappoint market expectations
Kelvin Lam (Senior China+ Economist)China+
In one line: China’s foreign reserves rise on positive currency and asset valuation effects
Kelvin Lam (Senior China+ Economist)China+
In one line: China's July export growth falls short of expectations amid slowing momentum
Kelvin Lam (Senior China+ Economist)China+
Korea’s export rebound disappoints markets, likely due to deeper-than-expected fall in car shipments to the US
Kelvin Lam (Senior China+ Economist)China+
Korea’s manufacturing activity continues to grow in July, but at a slower pace
Kelvin Lam (Senior China+ Economist)China+
Caixin PMI shows shrinking manufacturing activity for the first time in 9 months on extreme weather
Kelvin Lam (Senior China+ Economist)China+
In one line: Adverse weather shrinks China’s manufacturing activity; Korea’s WDA export growth slowdown likely temporary
Kelvin Lam (Senior China+ Economist)China+
- Chinese export growth surprised the market to the downside, as monthly momentum faded in July.
- Export recovery was dual-track, driven by high-tech demand, while low-tech shipments remain dull.
- Bond-selling by Chinese banks indicates short-term market intervention, probably under PBoC guidance.
Kelvin Lam (Senior China+ Economist)China+
Japan's wages surge appears driven by bonuses
Duncan WrigleyChina+
- Japan’s June wage rise beat market expectations, in both nominal and real terms.
- The rise was largely driven by a spike in special cash payments, rather than regular pay.
- Governor Ueda will, however, cite the wage uptick as justifying last week’s BoJ’s policy rate hike.
Duncan WrigleyChina+
- Weak Korean export rebound was disappointing; working-day adjusted growth actually eased sharply.
- Deeper dive in US shipment growth was the driver, coupled with a double-digit plunge in car exports.
- Firming KRW and easing cost burden give BoK more room to cut rates, but unlikely to hasten the timeline.
Kelvin Lam (Senior China+ Economist)China+
- China’s new urbanisation action plan, announced last week, has largely flown under the radar...
- ...But, if properly implemented, it should go a long way to rebalancing China’s economy...
- ...By unleashing the full domestic demand potential embedded in the unfinished urbanisation project.
Duncan WrigleyChina+
- Both July manufacturing PMIs indicate declining activity, especially the dip in the Caixin PMI.
- Extreme weather is only partly to blame; domestic demand is weak, as the growth model is revamped.
- China will keep adjusting incremental stimulus until growth is back on track at the “about 5%” target.
Kelvin Lam (Senior China+ Economist)China+
