ON DECK FOR MONDAY, SEPTEMBER 15
KEY POINTS:
- Markets in a positive mood to kick off a packed week
- China’s economy put in a mixed performance in August
- Canadian home resales post fourth monthly gain…
- …as interest sensitive readings keep gaining
- Canadian manufacturing and wholesale posted sharp gains
- US quiet with just Empire on tap
- Global Week Ahead — You’re Gonna Need More Coffee! (reminder here)
A fresh week that will be stacked with central bank decisions and global data is kicking off with a handful of releases out of China and Canada. The dollar is broadly weaker. European sovereign bonds are outperforming US Ts. Stocks are in the black with N.A. equity futures slightly positive and European cash markets outperforming.
MIXED CHINESE DATA
China released several readings for the month of August. Some were better than the headlines in my view because they emphasized base effect driven slow downs in y/y readings that dominate newswire coverage instead of month-over-month gains. Other readings extended their weakening trends.
- Retail sales were up by 0.17% m/m SA in August and rebounded from the prior -0.1% reading (chart 1). Base effects drove the y/y rate lower to 3.4% (3.7% prior).
- Industrial output climbed 0.37% m/m SA for a second month in a row and has been growing at a relatively rapid pace for several months (chart 2). Base effects drove a weaker y/y reading to 5.2% (5.7% prior).
- Home prices continue to slide (chart 3). New home prices fell 0.3% m/m SA for the twenty-seventh month in a row and resale prices fell 0.6% m/m SA for the twenty-eighth monthly decline in a row. Rate cuts can’t help property markets given a lack of confidence and expectations of further capital losses.
- China’s jobless rate ticked up to 5.3%.
- Fixed investment fell for a third straight month (-0.2% m/m SA).
CANADA’S HOME SALES KEEP ON GAINING
We have more evidence of traction on the interest sensitives in Canada in lagging response to rate cuts.
Canada registered a fourth consecutive monthly gain in seasonally adjusted existing home sales during August (+1.1% m/m SA). Chart 4. New listings were up 2.6% m/m SA. The sales to new listings ratio fell to 51.2%. Months supply fell to 4.4 for the lowest since January and remains below the long-term average of about 5.0 months which places the market roughly in balanced territory. Prices were little changed (-0.1% m/m SA) but down 3.4% y/y.
CANADA TO REFRESH MINOR MACRO GAUGES
Canada refreshes some minor data for July this morning. We already have advance guidance from Statcan pointing to strong gains in manufacturing sales and wholesale sales and revisions plus details like volumes will round out the picture (8:30amET).
QUIET IN THE US
There is nothing meaningful on tap in the US today, just the first of the regional manufacturing surveys when the Empire gauge arrives (8:30amET).
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