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Beijing Sees Surprise Price Increase China’s consumer-price index rose 6.5% in July from a year earlier, quicker than a 6.4% on-year rise in June, and more than economists had expected.  The biggest culprit in China’s rising inflation was food prices, which rose 14.8% from a year earlier, up from 14.4% in June. Non-food price pressures actually eased to 2.9 percent from 3.0 percent a month earlier. On a monthly basis, China’s consumer prices rose 0.5 per cent in July, faster than the 0.3 per cent rise in June.

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Meanwhile, the producer price index rose 7.5% from a year earlier in July, quicker than June’s 7.1% year-on-year rise.

China's July PPI rises 7.5%

China’s retail sales in July rose 17.2% from a year earlier, compared with a 17.7% rise in June. Retail sales rose 1.26% last month from June, after they rose 1.38% in June from the previous month. The annualized growth rate has slowed to 16% in the last 2 months even if inflation has accelerated.

Italian, Spanish Bond Yields Decline Central Bank’s Big Purchase Eases Investors’ Contagion Fears. Italy’s 10-year bond yield fell to around 5.3% from just over 6%. Spain’s fell even further, to 5.15%.

ECB

German Exports Fall  Narrowing Germany’s merchandise trade surplus, exports fell 1.2% on the month in June to €88.5 billion, after rising by an adjusted 4.4% in May. By contrast, imports rose by 0.3% to €77 billion. Based on Tuesday’s data, German second-quarter net exports were neutral for gross domestic product growth.

U.K. Industrial Production Stalls  Industrial production was flat in June from May, slowing sharply from the previous month’s 0.8% growth and undershooting analysts’ forecasts for a rise of 0.4%. Crucially, production fell 1.6% in the second quarter from the first, the biggest such drop since the first three months of 2009.

The Business Executives’ Sentiment Index (BESI) is a forward looking index that
incorporates senior executives’ perceptions on revenue growth and cost pressures
over the next 12 months.

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U.K. Housing Prices Fall House prices fell at a slower rate in July than June but the market is unlikely to pick up anytime soon, a poll of surveyors showed. Retailers said sales at stores posted a modest rise.

A plunge in the S&P of more than the -16.8%, down over the past 11 days, has occurred only twice without signaling a recession.

FTSE 100 dips into bear market London index down by as much as 20% since July peak.

European corporate earnings Business conditions and earnings have turned down in the first half. European companies (on a market capitalisation-weighted basis) have lagged expectations by 6 per cent in the second quarter. That is only the second quarter with a negative gap in the last five years – and the first was the post-Lehman fourth quarter of 2008.

South Korea Bans Short Selling of Stocks South Korea’s market regulator said it will ban the short-selling of all publicly traded stocks from Aug. 10 to Nov. 9 as it tries to shore up a plunging share market.

 

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