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SubscribeEconomic growth will be the theme in the financial markets this week. Japan and the UK will announce data on economic growth in the second quarter of 2019, which could be a sentiment driving the market.
Japan will announce the preliminary reading of economic growth in the second quarter of 2019 on August 8. Market participants expect the Japanese economy to slow down quite badly. Market consensus gathered by Reuters estimates that the quarterly annualized economy of the Rising Sun Country is 0.4%.
Slower than the quarter I-2019 which is 2.2%. Understandably, Japanese exports have contracted alias dropped for seven consecutive months due to the trade war of the United States (US) -China and a slowdown in the global economy. Japan's trade friction with South Korea made things even more complicated.
Then on August 9 local time, the Office for National Statistics (ONS) will announce the preliminary reading of UK economic growth for the second quarter of 2019. Market consensus from Trading Economics estimates that John Bull's economy grew 1.4% YoY. Slowed slightly compared to the previous quarter by 1.8%.
The slowdown in the UK economy has been seen from the Purchasing Manager's Index (PMI) data. In July, the IHS Markit / CIPS UK manufacturing PMI was at 48, the lowest in the past 6.5 years. "In July, we saw the manufacturing sector 'suffocated' because of the global economic slowdown.
Plus there is political uncertainty, "said Rob Dobson, Economist of IHS Markit, in a written statement. In addition to economic growth, investors should also look at the release of Chinese trade data on August 8.
In July, exports of the Bamboo Curtain country were estimated to contract 2.2% YoY, 7.6% YoY imports, and a trade balance surplus of US $ 37.49 billion, citing the consensus of Trading Economics. This data is important because it can determine the direction of US-China trade negotiations.
If China's trade surplus (especially against the US) continues to swell, then the US might become inflamed. US President Donald Trump can be more confident in implementing import duties for the import of products made in China valued at US $ 300 billion starting next September.
Yes, investors also seem obliged to continue to monitor the development of US-China trade relations that are getting hot again. Because, China will reply if the US really imposed the import duty. Instead of trade peace, the US-China will instead lead to the umpteenth volume of trade war.
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