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Here is what’s on the economic calendar in Asia today – China trade data

  
Analysis, Economy

2245 GMT New Zealand Food Price (inflation) for June

  • expected +0.1% m/m prior +0.4%

2301 GMT UK BRC Sales like-for-like for June

  • expected +24.0% y/y, prior +18.5%
  • like-for-like sales data strips out the impact of changes in store size.

0130 GMT Australia NAB business confidence and business conditions for June

  • priors 20 and respectively 37
  • National Australia Bank Business survey

China’s trade balance data, there is no firmly set time for this, some time after 0200GMT is usually the safe bet.

China trade balance: expected CNY 271bn, prior was CNY 296bn

 

  • Exports y/y: expected 29.6%, prior was 18.1%
  • Imports y/y: expected 32.3%, prior was 39.5%

 

USD terms

 

  • China trade balance: expected $44.2bn, prior was $45.53bn
  • Exports: expected 23.1%, prior 27.9%
  • Imports: expected 30.0%, prior was 51.1%

Japan data – Core machinery orders for May rose m/m and y/y

  
Analysis, Economy

 Japan Core Machinery Orders for May up 7.8% m/m

  • expected 2.6%, prior 0.6% m/m
  • and +12.2% y/y vs. expected 6.3%, prior 6.5% y/y
  • Used as a capex indicator for Japan in the months ahead

Government says this indicator is showing signs of a pick-up and raises its assessment.

—
ps. post delayed because I hadn’t realised it had not published …. here it s now 🙁

China state financial media say there could be more support for the economy incoming

  
Analysis, Economy

The China Securities Journal cites analysts:

  • H2 economic growth is expected to be not as quick as in H1 (2021)
  • government could increase policy support
The article comes after last week’s RRR cut which was not a ‘targeted’ cut (these tend to stimulate, by making lending less restrictive, specific parts of the economy such as lenders to SMEs &/or others) but rather a broad cut. Estimates of funds released range circa 1tln yuan.
What is immediately on the horizon is the People’s Bank of China’s monthly lending rates announcement, which comes on July 20. You’ll be familiar with these each month the 1- and 5-year loan prime rates. They are unchanged for 14 months.
Of course, interest rates cuts are only one possible tool.
The China Securities Journal cites analysts:

Biden says he expects congress to act on US debt ceiling

  
Analysis, Economy

Biden to sign executive order to increase competition

Biden
  • We’ve seen less competition in our economy and that’s holding our economy back
  • Cites pharma, hearing aids and internet services
  • Capitalism without competition isn’t capitalism, it’s exploitation
  • There will be no more tolerance for abusive monopolies
  • FDA will safely import prescription drugs from Canada
  • Hearing aids will be sold over the counter
  • Executive order will target non-compete clauses
There’s a strong consensus about eliminating non-compete clauses, especially in low-wage workers. He cited clauses preventing McDonald fast food workers from going to Burger King.

G20 Finance Ministers and Central Bank Governors’ meeting begins in Italy Friday 9 July 2021

  
Analysis, Economy

Today and Saturday the G20 Finance Ministers and Central Bank Governors meet in Venice.

This will be the first in-person Finance Track meeting since February 2020
Discussions will be held on
  • the international economy and global health
  • efforts towards economic recovery
  • promoting more sustainable growth
and more.
What are described as “side events” include:
  • Global Forum on Productivity
  • G20 High-Level Tax Symposium
  • Climate
There will be headlines from this, all the talking heads are attending.

The BOJ meet next week – likely to lower GDP forecast

  
Analysis, Economy

The Bank of Japan meet July 15 and 16. Thursday and Friday next week.

The policy statement and the Bank’s latest updated forecasts (in its Outlook Report) will be made Friday at the conclusion of the meeting (there is no firmly set time for the announcement, sometime between 0230 and 0330 GMT on Friday is a good bet).
Reports are the Bank is expected to slash this fiscal year’s growth forecast in its latest projections.
Earlier this week the Japan Center for Economic Research said its assessment was Japan’s gross domestic product dipped 0.04% on the month in May (using inflation adjusted data … albeit not much inflation in Japan!).
  • the second straight monthly decline, though marginal
  • Consumption -0.7%
  • Housing investment -1.1%
  • capital investment by private companies +0.6%
  • Exports -0.2%, imports -2.6%
  • reduced production in manufacturing such as automobiles
  • “Due to a shortage of semiconductors, passenger vehicle production may have begun to deteriorate”
Earlier this week there was mixed news, BOJ maintains assessment for 5 of 9 Japanese regions in latest economic report:
  • two upgrades & two downgrades
In other news, Tokyo will be in a state of emergency right through its Olympics. The city has been dealt an awful hand with these Games and is making the very best of it in the circumstances.
The Bank of Japan meet July 15 and 16. Thursday and Friday next week.

Russia raises its inflation, GDP, capex forecasts

  
Analysis, Economy
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Russian economy ministry issues revised forecasts

 

  • 2021 GDP growth forecast up to 3.8% from 2.9%
  • lifts Urals oil price forecast to $65.9/bbl from $60.3/bbl
  • 2021 inflation forecast to 5% from 4.3%
  • 2021 capital investment growth forecast to 4.5% from 3.3%
  • 2021 average dollar/rouble rate to 72.8 from 73.3 seen in April

 

The ministry comments on the higher forecasts:

  • We see the economy is recovering faster than we had expected
  • Our experts say the economic recovery potential is not exhausted yet
On the currency:
  • We all realise that the rouble price should be different at oil prices of $75 per barrel
  • current rouble weakness blamed on sanction risks, OPEC+ uncertainty around global oil output.
Russia’s inflation target is 4%, the latest reading has it at 6.5%. Russia’s central bank is expected to raise its key rate again from 5.5% on July 23.
USD/RUB daily chart:
USD/RUB daily chart
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