Fisher Investments recaps the biggest market, political and economic news from last week, including US, UK and eurozone June core consumer prices, Japanese monetary policy and Chinese Q2 2021 GDP.
In the US, June retail sales grew 0.6% m/m and 18.0% y/y, ahead of forecasts. Industrial production expanded 0.4% m/m in June while manufacturing production declined 0.1% m/m. June headline and core consumer prices (excluding food and energy) rose 5.4% y/y and 4.5% y/y respectively—both more than expected. While inflation readings continue to garner headlines, a deeper dive into the data reveals that inflation appears fairly benign outside certain narrow categories affected by supply shortages and resurgent post-lockdown demand. For more, please see our 7/13/2021 commentary, “Inside June’s CPI Jump.”
In the eurozone, May industrial production decreased 1.0% m/m but increased 20.5% y/y, both lower than anticipated. June headline and core consumer prices (excluding energy, food, alcohol and tobacco) rose 1.9% y/y and 0.9% y/y, respectively—both in line with expectations. In the UK, June headline and core consumer prices (excluding food and energy) rose 2.5% y/y and 2.3% y/y, respectively. The unemployment rate held steady at 4.8% for the three months ending in May.
In Japan, data were light. May industrial production declined 6.5% m/m while increasing 21.1% y/y, both missing forecasts. The Bank of Japan kept short-term interest rates unchanged at -0.1%. In China, Q2 2021 GDP rose 7.9% y/y, missing expectations. June retail sales increased 12.1% y/y, beating forecasts. Industrial production expanded 8.3% y/y in June, higher than expected. June exports and imports rose 32.2% y/y and 36.7% y/y, respectively—both significantly beating consensus estimates.
The Week Ahead:
The US, UK and eurozone announce July purchasing managers’ indexes (PMIs). The US reports the June Leading Economic Index (LEI) reading. The UK announces June retail sales numbers. Japan announces June trade and inflation data. The European Central Bank meets to set monetary policy.
Source for all data cited is FactSet. This update constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. No assurances are made we will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. In addition, no assurances are made regarding the accuracy of any forecast made herein. Global equities are represented by the MSCI World Index. The MSCI World Index measures the performance of selected stocks in 23 developed countries and is presented net of dividend withholding taxes and uses the maximum rate applicable to non-resident institutional investors who do not benefit from double taxation treaties. Past performance is no guarantee of future results. A risk of loss is involved with investments in stock markets.