Tuesday: China activity slumps in July

The Bank of Japan is given food for thought from a weak GDP print. China’s activity slows sharply. Oil prices are back up around 3% on renewed conflict worries. New Zealand price pressures ease.

In our deep-dive interview, ANZ Economist Maddy Dunk explains why ANZ Research has cut its Australian house price forecasts.

5 things to know in 5 minutes:

1. Japan’s Q2 GDP was weaker than expected yesterday, growing 1.1% from a year ago from 1.9% previously. ANZ Head of FX Research Mahjabeen Zaman says the soft result comes as the Bank of Japan is weighing up whether to raise rates in September or October.

2. Oil prices were up about 3% overnight. ANZ Senior Commodities Analyst Daniel Hynes yesterday published a note analysing how diesel is becoming the key pressure point for the world economy.

3. China’s suite of July activity indicators yesterday were weaker than expected. ANZ Chief Economist for Greater China Raymond Yeung says authorities will be looking at whether to respond with monetary or fiscal policy - or both.

4. Some softness in New Zealand’s inflation pulse as selected prices came in weaker than expected in July. ANZ Senior Economist Miles Workman says this introduces some downside risk to ANZ Research’s forecast of Q3 CPI of 0.8%.

5. Thailand’s growth fell to 1.9% year-on-year in the second quarter from 2.8% in Q1. However, it was still a touch stronger than market expectations, says ANZ FX Analyst Kausani Basak.

Cheers,

Alex.

PS: Catch you tomorrow with a look ahead to Australia’s Q2 wage data.

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