AUD

• China data. China’s post-COVID recovery continues to stumble. The pick-up in annual growth wasn’t as strong as anticipated.• Shaky sentiment. Growth concerns exerted some downward pressure on bond yields, commodities, the CNH, the AUD & NZD.• US trends. US retail sales due tonight. A solid report could see US rate expectations lift, supporting the USD. RBA minutes released today. Mixed fortunes across markets at the start of the new week with China’s data batch in focus. China’s post-COVID recovery continues to stumble with the economy expanding by 0.8% in Q2. As a result, the pick-up in annual growth wasn’t...

• US sentiment. US yields & the USD recovered some ground after US consumer confidence rebounded. US retail sales in focus ahead of next week’s Fed meeting.• China in focus. China Q2 GDP & monthly activity data released today. The post COVID recovery has been faltering. Soft data could dampen risk sentiment.• AUD sluggish. The AUD’s upswing has lost steam. We think offshore forces could outweigh another solid Australian labour market report this week. Relative to the substantial adjustment earlier in the week, markets were more sedate on Friday, with a bit of a reversal coming through in bonds and...

• Weaker USD. Lower than expected US CPI was compounded by soft PPI inflation. US bond yields have fallen back further. The USD has weakened.• Risk sentiment. The shift in interest rate expectations has boosted risk appetite. Equities & commodities higher. The AUD has jumped up.• Too far too fast? Markets have moved a long way very quickly. Inflation is heading in the right direction, but central banks may not declare victory just yet. The adjustment in markets following the lower-than-expected US CPI data (released two nights ago) has continued with softer producer price inflation reinforcing the ‘disinflation’ theme. Equities...