In recent months the PBOC has focused on adding liquidity in a targeted fashion, with the aim of alleviating funding pressures on the private sector, where companies have traditionally faced higher hurdles to obtaining credit. Reserve requirements have been cut three times this year.

source: Bloomberg



  • China’s GDP growth slowed slightly in 2Q in real and nominal terms, staying within the government’s comfort zone. The June activity data though, showed momentum slowing more sharply than in previous months – signaling weakness heading into 2H
  • The deleveraging agenda is putting a heavier damper on the economy, and a trade war with the U.S. has started to dent early gauges on exports and production — pointing to stronger headwinds in 2H
  • Bloomberg credit impulse – which measures the change in new credit as a share of GDP – is now pointing firmly down



  • Headline industrial production topped expectations in June, rising 0.6% following a sharp downward revision to May (now at -0.5% vs. -0.1% as initially reported)
  • While the May results showed surprising weakness, it was largely attributable to supply-chain disruptions related to an auto parts supplier temporarily going off-line. Auto assemblies plunged as a result, dragging down the overall results, and subsequently surged back in June. This reaffirms Bloomberg Economics’ initial expectation that the net impact on the quarter would be minimal as production would have time to make up backlogs in June. Outside the motor vehicle production volatility, factory output expanded more gradually, buoyed by high-tech production


  • The latest update on inflation bears a warning for the European Central Bank. Prices excluding volatile components rose less than initially reported in June. Headline inflation was confirmed at 2%. The ECB aims to keep price growth just below that rate in the medium term
  • Based on updated forecasts, ECB President Mario Draghi said at the time that record-low interest rates and large-scale asset purchases had contributed to a substantial improvement in the outlook, predicting that underlying price growth would pick up toward the end of the year
  • Executive Board member Peter Praet has stressed in recent speeches thatsignificantstimulus is still needed to further build up domestic price pressures


  • Federal Reserve Chairman Jerome Powell downplayed the threat of a trade war to the US economy. He also dismissed a key recession signal emerging from bond market yield spreads, despite its historical reliability
  • Fed Chairman Jerome Powell affirmed the Fed’s plans to raise interest rates gradually “for now” during a second day of testimony on Capitol Hill. The Fed chief also said the economy was strong enough to handle tighter monetary policy. He also added “that growth in the second quarter was “considerably stronger that in the first.”

source: Bloomberg

Important News

  • The daily exchange rate set by the People’s Bank of China versus the dollar, known as the ‘fix’, was adjusted to 6.7671 on Friday, leading to a move 0.9% lower. Chinese growth concerns combined with trade conflicts and the prospect of diverging interest rate expectations between the US and China have led the yuan to drop 5.3% against the dollar in the past month
  • President Donald Trump again accused China of devaluing its currency and reiterated his criticism that the Federal Reserve is raising interest rates

source: Bloomberg e EFG AM


Indicies and Equity Sectors

The information provided has been compiled with the utmost care. WMM does not provide any guarantee (including resposability to third parties) regarding the accuracy, updating, reliability and completeness of the published contents. Furthermore, the published content does not constitute a solicitation or an offer to use the services of WMM, nor does it constitute any form of advice