Markets renewed with enthusiasm
Despite the world’s second largest economy releasing the weakest GDP in 27 years, slowing down on a yoy and sequential basis to 6.2 percent in the second quarter–largely due to the trade war with the U.S., markets were filled with upbeat sentiment to better than expected internal numbers. Retail sales and industrial output improved, income registered growth and consumer spending notched upwards.
Shanghai and Shenzen stocks ended the day 0.4 percent and 1.0 percent higher, respectively, whereas every major index in europe traded up after the news. That the trade war did not deliver a worse impact on the Chinese economy and that China now can depend on a robust domestic economy instead of pressured to accept just any trade deal are seen as a positive by the markets.
Oil heads north
Oil prices rebounded (Brent rose 0.21 percent to 66.86 a barrel) on Monday after better-than-expected Chinese data supported higher prices driven by existing supply constraints such as lower U.S. production due to hurricane Barry, decreasing U.S. crude stockpiles, and recent middle east tensions with Iran.