Saxo Bank | Aug 11, 2013 06:14AM ET
It should be a quiet day, with focus largely shifting to next week’s data from Europe and the US. The day will therefore be dominated by Chinese data on the real economy in July. After the shock in China's interbank markets in June and the declining PMI-indices, many commentators have been worried about the sustainability of the recent pickup in European and American monthly data in the face of slower Chinese growth. In response to the weakness, the Chinese government announced a small stimulus package in July, with the intent of meeting its targeted annual 7.5 percent gross domestic growth rate.
Market anxiety has now been alleviated by the recent improvement both in the PMI and the trade data, as The Wall Street Journal, Fredrik Oqvist and Ole Hansen’s two charts on iron ore and oil trade patterns showed. Today’s numbers should confirm that the Chinese economy is doing pretty well, albeit at a slower rate than what many have become accustomed to. The market seems to have factored the slower growth outlook into prices, so there is now room for at least a slight positive surprise. The Chinese consumer- and producer price indices for July were published already earlier during the night.
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