Global Macro Perspectives
Retail sales fell 1.2% in May . The consensus was at 0.2%, April reading was a gain of 0.4%. Autos taken out, the figure was -1.1%; the consensus was at 0.1%; prior reading at 0.4%. Big and clear disappointment and a confirmation of a major economic slowdown coming in the second half of the year. Chart 1. […]
Intriguing article by Financial Times: Property tax offers path to Chinese reforms. To sum up. Chinese government is thinking on introducing a property tax to rein on real-estate speculation. China will start to introduce some form of annual tax on residential property in the coming months. If that does happen – and it is still […]
China fixed asset investments rose 25.9% in May; the consensus was at 25.7%, April reading was 26.1%. Real-estate accounted for 46.2% of fixed asset investments. Scary. Chart 1. China Fixed Assets Investment
All of China monetary aggregates rose in May: M0 was up 15.3%; M1 was up 29.9%; M2 was up 21.0%. New loan issuance was also strong (up 21.5% YoY). If they don’t tighten fast, they will miss the opportunity…and the bubble bursts in an ugly way. Chart 1. China Monetary Aggregates Chart 2. China New Loans
Industrial production growth in China fell to 16.5% in May from 17.8% in April. The consensus was at 17.0%. Inventory adjustment has ran its course; export demand could be weaker in the second half of the year; both setting path to moderation in industrial production. Chart 1. China Industrial Production
CPI was up 3.1% vs. 3.0% consensus and 2.8% reading in April. PPI was up 7.1% vs. 6.8% consensus and same April reading. The prices are rising despite lower crude oil and commodity prices. The mail driver was rise in food prices. PPI / CPI gap widening putting pressure on corporate margins. Chart 1. Producer & Consumer Price […]
Working gas in storage rose 99 Bcf from previous week. The natural gas price got a little ahead of itself on drilling ban. Chart 1. Natural Gas Futures Chart 2. Working Gas in Underground Storage Compared with 5 Year Average Chart 3. Natural Gas Futures Curve