Chinese GDP data surprised on the upside this week as the economy was reported to have grown at 6.4% over the past 12 months versus estimates of 6.3%. Alongside GDP, other Chinese data released was also impressive, as retail sales and industrial production both beat estimates, signalling the Chinese economy is benefiting from a waning of trade tensions with the US, and demonstrating government stimulus measures are beginning to take hold.
US retail sales also beat expectations this week, rebounding from a negative figure last month to show a gain. In summary, economic data was broadly positive, the lack of inflation helps reduce pressure on central banks to tighten monetary policy, whilst other data points signal reasonable growth in economies globally.
Away from data, it is worth mentioning The Mueller Report. On Thursday, US Attorney General Bill Barr published a redacted version of the report into the Russian interference in the 2016 US Presidential Election. What has been published is largely inconclusive, with both sides spinning the story to suit their own agenda. Special Counsel Robert Mueller said he lacked confidence to clear Donald Trump of obstruction of justice but suggested Congress could take action on at least 10 instances where the president sought to interfere with the probe. This is counteracted by comments made by Bill Barr that he disagreed with Mueller’s findings. Much like Brexit, expect this story to continue for some time.
Next week, some of the important data releases include US GDP and core PCE (the Fed’s preferred measure of inflation), UK public finance data and in Japan we have monetary policy, industrial production and retail sales.
Peter Quayle, Fund Manager