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Trinh Nguyen
@Trinhnomics
, 5 tweets, 2 min read Read on Twitter
Good morning☀️. Tokyo July CPI slowed & we got June Singapore industrial production (another contraction). After the ECB paving path for life deeper below zero & maybe APP in Dec, Fed meeting most key & non-defense spending capital goods jumped 📈💪🏻 1.9% (exp 0.2) from 0.3 in May
In Asia, tomorrow we got China industrial profits for June & next week we got July PMIs. Based on what we know about external demand (contracting manufacturing in the Eurozone & -19% imports by China from Korea), external headwinds STRONGER.

Meaning, don't expect a miracle🧙🏻‍♀️.
The convergence at contraction (state +Caixin) for manufacturing shows that the sector is weak. July PMI data from developed markets (Germany, France, USA) & Korea export data both point to CONTINUED WEAKNESS & not a V-shaped recovery. That March bounce was very short-lived in Q1
The June jump of Chinese data likely to be a March story - a spurt to reflect some idiosyncratic trends & not a beginning of a V-shaped recovery. Reasons for July weakness:

External headwinds ✅✅
Risk aversion ✅
High debt ✅
Tight liquidity ✅

Not to mention structural issues
Yes, it is hot 🌞🔥💥 & sunny today, even from desk. Happy Friday!!!
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Trinh Nguyen
@Trinhnomics
Good morning - Korea Q2 2019 GDP bounced back from contraction to +1.1% qoq sa & 2.1%YoY (our estimate is 2.2% for the entire 2019);

But don't get excited, as Q3 2019 data so far has been weak. SK Hynix, a major semiconductor producer said expects 'significant' 2020 investment.
Markit data of US manufacturing PMI shows weakness (down to 50 from 50.6) but services bounced to a 3-month to 52.2 from 51.5 in June. Composite rose to 51.6 vs 51.5

Overall, this should keep the USD strong as US data remains resilient. ECB meeting today is very key.
Expectations of the ECB is that the ECB will set dovish expectations for September, which means paving way for life deeper below zero ❄️🌨️🥶

EUR doesn't like the collapse of German manufacturing PMI b/c it means the hurdle for life deeper below zero by the ECB is cleared 🏇🏻👌🏻
Read 12 tweets
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Trinh Nguyen
@Trinhnomics
France 🇫🇷 July manufacturing PMI declined to 50 from 51.9 and so the EUR/USD fell immediate after. Services were shaken too, decelerating to 52.2 from 52.9 😬
My guess is that the decline of Chinese imports (remember my rant on China sheltering its economy using the current account as a first line of defense?) is showing up in France's stagnant new export business 👇🏻
While we wait for German manufacturing (or lack of it), let's look at what happens when China uses its current account as a 1st line of defense?
a) Chinese imports decline (by -4% ytd in H1)
b) Countries that depend on Chinese imports see fewer orders! 😬

Read 11 tweets
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Trinh Nguyen
@Trinhnomics
Good morning 🦋- July Malaysia CPI will come out, which is expected to rise due to the base effect but to remain sub 2% and will not be a hurdle for rate cut

Eyes on tomorrow for Korea 2Q GDP & ECB. But Q2 is lagging & July is already telling you that H2 2019 recovery is elusive
*June (July hasn't ended yet)
As expected, the chills on EUR continues w/ Boris Johnson head of Brexit & the UK and the start of the Union without the Kingdom. And so, in response, we got the ECB likely to pave the path for life deeper below zero. The BOE too is likely to follow w/ rate cuts later in the yr.
Read 15 tweets

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Christophe Barraud🛢
@C_Barraud
🇨🇳 #CHINA Q3 GDP Y/Y: 6.5% V 6.6%E (slowest growth since Q1 2009)
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🇺🇸🇨🇳🇪🇺 In a volley of filings, the EU, #China and the U.S. this week escalated disputes over new U.S. metals tariffs, the European response to those levies, and Chinese intellectual property practices - Bloomberg
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Millennial Macro
@MillennialMacro
#demographics #militaries #economies #currencies
#USA
- Best demographics
- Largest military
- Largest economy
- Most used currency
- Liquid financial markets
- Open capital account
- Rule of law
- Best geography
- Can be self sufficient if required
- Not trade dependent
#USA
Top trade partners as of 30 June 2018:
- China: 15.2% (strategic competitor)
- Canada: 15.1%
- Mexico: 14.6%
- Japan: 5.1%
- Germany: 4.4%

The next 10 years could result in the below:
- Mexico (25%)
- Canada (20%
- Japan (7%)
- South Korea (5%)
- Great Britain (4%)
#USA
Bring the manufacturing (jobs) home while negatively impacting China's economy.
forbes.com/sites/kenrapoz…
cebglobal.com/talentdaily/au…
irishtimes.com/business/econo…
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Jeremie Cohen-Setton
@cohensetton
This morning @BLS_gov published #CPI for June. Of particular interest is the data on washing machines as @realDonaldTrump introduced a 20% tariff on them in Jan. Since then, I find that their price is 16% higher than would otherwise have been expected without the tariff. @PIIE
The biggest month to month price increases were in April (+9.6%), May (+7.4%), and January (+3.4%). The price increase for June is +1.8%.
The empirical model predicts the change in the price of washing machine based on its own lags and on current and lag values of inflation. Using current and lag values of retail sales as predictors do not change the order of magnitude.
Read 5 tweets

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