Thomas Watts, Investment Analyst, abrdn, comments on the economic data releases this week;
“With the excitement (for some) of a brand new top flight football season starting over the weekend, early season optimism will be at its highest as for the only time during the season, all 20 teams will start level…
“They say it’s the hope that kills you, a feeling many economists know well in regards to Chinese data during 2023. Regarded as the great hope for financial markets after scrapping its zero covid policy and reopening its economy earlier this year, China’s economic recovery has proven patchy at best, as the country seemingly heads into deflationary territory. Monday morning offers up not only Chinese retail sales data to analyse but also the country’s industrial production numbers too.
With China’s economy still majorly focussed on manufacturing, the data will prove key to allowing us to gauge the demand the world’s second largest economy is facing. The numbers are highly regarded as they act as a leading indicator of economic health, with production the dominant driver of the economy, reacting quickly to the ups and downs in the business cycle.
Also kicking off the week on domestic shores, we have the UK’s claimant count data, detailing the change in the number of people claiming unemployment-related benefits during the previous month, a key piece of data in understanding the overall strength of the labour market. The numbers should take on added significance considering just how robust the jobs market has been during the Bank of England’s rate hiking cycle, with very few signs of cooling down just yet. Analysts and those on Threadneedle Street alike will be scrutinising the various facets of the data in order to identify any possible cracks that could help sway the central bank’s rate decision one way or another.
With all the various football managers giving their final press conferences before the first weekend, describing the tactics they’ll employ and what their objectives are for the upcoming season, Wednesday will give economists something similar as the US Federal Reserve hold a press conference of their own. Releasing the minutes from their previous meeting, we should gain a greater insight into why each member voted they way they did concerning rates and what their outlook for the future of the US economy is.
The news worthy events of the coming week are very much centred during its first few days, potentially setting the tone for the what is to come, that old adage, it’s a game of two halves has never seemed so relevant.”