View in Browser

Sign up for Reuters newsletters

A look at the day ahead in European and global markets

By Brigid Riley, Markets Correspondent

Data refreshes every time you open this email. For more European market news, click here. Please send any feedback to morningbid@thomsonreuters.com” style=”text-decoration: underline; color: #404040;” rel=”noopener”>morningbid@thomsonreuters.com.

China’s new home prices fell in June for the first time this year, adding to an alarming picture of the world’s second largest economy from a sector that has become a persistent source of trouble.

Global stock markets looked accordingly gloomy in the Asia morning, with both the Nikkei and Hong Kong’s Hang Seng down more than 1%, although markets will get another glimpse at economic signals from Europe and United States with Britain’s CPI and Fed minutes out later in the day.

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, March 17, 2023. REUTERS/Staff/File Photo

The bad news on Chinese property follows an unexpected rate cut by China’s central bank yesterday and a parade of weak data releases throughout much of this year, but the cut was at best an anaemic response to markets’ rising calls for economic stimulus.

Britain’s July CPI data will likely hold a sliver of good news, with annual headline inflation expected to have eased to 6.8% from 7.9%, although that still leaves inflation much too high for the Bank of England’s (BOE’s) liking.

Markets currently seem all but certain of another hike from the BOE, with a more than 90% chance seen for a 25 basis point increase in September. Expectations lean towards rates having to go even higher in the future, in contrast to the BOE’s peers in the EU and the United States.

The euro zone also gets an economic data drop on Wednesday, with preliminary Q2 GDP figures estimated to show meager growth of 0.2% and industrial production data likely to be negative.

While economists are narrowly leaning towards a pause in European Central Bank rate hikes in September, the EU is experiencing some jitters as inflation remains above target and economic data from Germany indicates that Europe’s largest economy may be sputtering.

Meanwhile, the Federal Reserve minutes are sure to garner attention as markets seek more insight into the Fed’s thought process. U.S. retail sales jumped higher on Tuesday in a surprise show of resilient consumer spending, although that didn’t shake expectations that the Fed’s aggressive tightening campaign is over.

As the will-they-or-won’t-they discussion over rate hikes continues in the West, the New Zealand central bank boosted its local currency despite all the China gloom by extending until 2025 the time frame when it expects to hold rates at their current 14-year highs.

Graphics are produced by Reuters.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Sponsors are not involved in the creation of newsletters or other Reuters news content.

Morning Bid is sent every morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.

Want to stop receiving this newsletter? Unsubscribe here.
To manage which newsletters you’re signed up for, click here.

Reuters Terms & Conditions and Privacy Statement