Morning Brief – China: The Growth Story

China: The Growth Story

 

Bizarre really that market analysts are wringing their collective hands because China’s growth for this quarter may dip below 6% after 6.2% in the last reported March to June period. In Europe’s anaemic world, we can only dream about such a figure. Needless to say the headlines will all reflect the impact of the trade war on the world’s second largest economy, but China is still projecting a growth figure of 6.5% for 2019 which is not too shabby. In any case if you have not spotted it, October 1st 2019 is the 70th anniversary of the founding of the People’s Republic of China and why is that significant? Be sure: there will be a lot of celebratory projects and spending in Q4 which will make damn sure that that 6.5% figure is achieved!

 

 

Oil and Interest Rates

 

With WTI Oil now at $58 versus the $55 pre drone attack price, measures taken by the Saudis to restore supplies and a minor drop in the temperature of the US anti Iran rhetoric can so far be judged to have been successful. Markets have moved on to sift through the Fed announcement of the cut in US rates and the BoE report from yesterday which signalled low rates for longer in the UK. What both Central Banks have done is to give themselves flexibility to cut or not cut later-albeit for very different reasons-rather than expend the meagre ammunition that remains to them too early.

 

 

UK Retail Sales

 

A surprise drop of 0.2% in retail sales and a much larger fall of 3.2% in on line sales from the previous month. Never fear, the SGM-FX team of analysts can explain this: canny SGM-FX shopper Graham has been spotted nipping into Costco on a much more frequent basis in recent weeks while his online Amazon deliveries to the office have dwindled to a trickle-just how many widescreen TVs does a man need?! 

Alas these trips to Costco have not been sufficient to keep the whole of UK Retail Sales on an upward trend, but we do understand that Graham has a full freezer of tomahawk steaks and chicken breasts (less than £1 each if you are interested) as well as crates and crates of wife beater(Stella Artois). What a patriot!

 

 

 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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