Work, repression, and fork Reuters

(Reuters)-

1/ Unexpected?

Is the sharp rebound in US economic growth this year losing momentum? The massive economic data to be released by the world’s largest economy will provide clues.

The number of non-farm payrolls in the United States on August 6 will provide a snapshot of July hiring. Economists surveyed by Reuters predict that the economy added 926,000 jobs in July, after surpassing expectations of 850,000 in June. Prior to the non-agricultural employment report, the ISM manufacturing report and Purchasing Managers Index (PMI) survey will be released.

The strong US economic data has at least to some extent promoted the stock market. But data beyond the forecast may become the exception rather than the rule.

Take a look at Citi’s US Economic Surprise Index, which measures how much data exceeds or falls below economists’ forecasts. It is currently 3.2, a far cry from the record high of 271 set in July 2020.

-WRAPUP 4-The U.S. economy returns to pre-pandemic levels; the labor market is healing

Graphics: Not surprisingly: https://fingfx.thomsonreuters.com/gfx/mkt/gkvlgmblzpb/Pasted%20image%201627493171070.png

2/ China’s repression

The crackdown by regulators has kept investors away from the Chinese stock market. With the tightening of restrictions on technology giants, these radical moves are likely to mark the end of the “barbaric growth” of Internet companies.

The authorities are eager to calm market tensions through soothing editorials and promised more stability in the future. This provides a bottom line for stocks and RMB.

What investors want to see now is the severity of the slowdown in China’s economic growth. If the PMI survey in the coming week shows that the growth of the manufacturing industry is slowing and the service industry is flattening, it may be the next test of the market.

-FACTBOX-From education to Bitcoin, the season of regulatory suppression in China

Chart: BAT and FAANG: https://fingfx.thomsonreuters.com/gfx/mkt/egvbknonxpq/Pasted%20image%201627380472497.png

3/ GBP growth

In the context of rising inflation and improving economic growth, although the board of directors has some disagreements on the scale of its bond purchase plan, the Bank of England will keep the stimulus plan running at full speed when it meets on Thursday.

Due to the rapid rollout of COVID-19 vaccination and the economic adaptation blockade and subsequent reopening, the International Monetary Fund expects the UK’s growth to reach 7% in 2021.

Everything is more optimistic than a few months ago. With the reopening of the UK still on track, the pound has risen.

What to watch at the BOE meeting? Of course, its views on the economy, but after two decision makers recently broke the rankings and suggested ending their nearly 900 billion pounds ($1.2 trillion) bond purchase plan ahead of schedule, it will be a matter of measuring whether this view has gained more support. Interesting things.

-Despite differences in inflation risks, the Bank of England will maintain full stimulus

-IMF raises UK economic growth forecasts for 2021 and is cautious about the long-term

Illustration: Foreign exchange and vaccination: https://fingfx.thomsonreuters.com/gfx/mkt/egvbknlnkpq/Pasted%20image%201627557471648.png

4/Europe’s inflation frontline

Each earnings season has its own unique flavor. Unlike recent quarters, this quarter has nothing to do with blockades or tax cuts, but about inflation and how the company responds.

The consumer staples industry in Europe is at the forefront of concerns about how raw material, transportation and labor costs may affect profit margins. Bank of America analysts pointed out that during the company’s second-quarter earnings conference call, mentions of inflation increased by more than 400% year-on-year. Materials, financial and consumer products companies are the most prominent.

Many companies, such as Unilever (NYSE:), Reckitt or Nestlé, regretted the stress. As reported by Nivea manufacturer Beiersdorf, fashion retailer Zalando, and automotive supplier Continental, other heavyweights that are sensitive to inflation may follow suit in the coming week.

It is also an important week for banks, HSBC, Societe Generale (OTC:), Standard Chartered Bank (OTC:), Commerzbank (DE:), Union Bank of Sao Paulo (OTC:) and Credit Agricole (OTC:) ) Will publish reports.

-Update 4-Inflation concerns overshadow Unilever’s strong performance in the first half of the year and hit the stock price

Chart: Inflation in the earnings call: https://fingfx.thomsonreuters.com/gfx/mkt/zdpxoyqljvx/inflation%20and%20inflation.JPG

5/ Ether Awakening In May, Bitcoin was booming, setting a record of nearly US$4,400. Ethereum, the second largest cryptocurrency, plummeted, plummeting by nearly half.

Now, Ethereum’s underlying protocol is facing changes, which may reduce its supply. This transition is called EIP-1559 and will expire on Thursday and is intended to stabilize the fees paid by users of the Ethereum network. In the short term, this may support prices—and it may also make tokens easier to use in mainstream finance. But maybe this move has been priced during Ethereum’s strong rebound earlier this year? Encryption enthusiasts may want to watch this space.

-More cryptocurrencies flowed out last week, and Bitcoin flowed out for the third time in a row-CoinShares

Picture: Upgrade: https://fingfx.thomsonreuters.com/gfx/mkt/akpezgnalvr/Ethereum%20upgrade.PNG