Key events and economic wrap - Westpac

Imre Speizer, analyst at Westpac offered an economic wrap for end of business last week and risk events ahead for today. 

Key Quotes:

"The US dollar benefitted from a strong US retail sales report, a more risk-averse mood also helping. Most equity indices close slightly lower, the S&P500 -0.1% (although it did make a fresh record high first)."

"US retail sales rose 0.6% in June (vs 0.1% expected) although downward revisions worth 0.3ppts to the prior month offset that partially. The all important control group rose 0.5%, a stronger than expected read too, and the prior month was revised up 0.1ppts. 9 of 10 spending categories posted gains in the month underscoring the strong headline. Q2 GDP expectations will be revised up on this (the Atlanta Fed GDP model sits at 2.3% currently). Retail sales adds to an ever lengthening list of very solid updates in recent weeks - both ISMs, payrolls and now retail sales.

CPI rose 0.2% (vs 0.3% expected), although the core measure was as expected at 0.2%. Industrial production rose 0.6% (vs 0.3% expected). Consumer sentiment (Michigan Un.) fell from 93.5 to 89.5 (vs 93.5 expected).

Economic Event Risks Today

NZ: Q2 CPI is expected to be 0.5% (qoq and yoy), which is 0.1ppt below the RBNZ’s forecast. This data will be an important input to the 11 August MPS (and possibly the RBNZ’s economic assessment this Thursday).

China: property prices. Tier 1 saw loss of momentum last month. Is fatigue set to take hold?"