According to Japan’s preliminary GDP analysis on Monday, data shows a contraction in the economy due to the fall in exports, corroborated with a weak consumption. As per Japan’s Cabinet Office, the GDP fall was of 0.4% in Q2 but still above the forecasted 0.5% contraction. The 0.4% recession comes after Q1’s 1.0% expansion. Annualizing the amounts, we are looking at a 1.6% fall in economy after an expansion of 3.9% registered in the March quarter. The major boost in the first quarter were the inventories, which turned out almost flat in the second one adding only 0.1 as percentage points in the GDP.
The RBA (Royal Bank of Australia) made little noise with today’s minutes, the AUD/USD flickering for a very short period; the spike towards the 0.74 threshold reverted quickly to the usual 0.7360 area. The minutes offered no surprise, RBA going forward with the bullish sentiment, although cautious due to the fact that a rate hike from Fed (USA’s Federal Reserve) could push the USD against the Aussie.
UK’s ONS (Office for National Statistics) published yesterday the annualized living cost measured through the CPI (Consumer Price Index). Data showed a 0.1% upbeat in the CPI’s trend for July, although no movement was forecasted. The monthly CPI fell with 0.2% in July, 0.1% higher than the expected 0.3% drop. The core CPI rose 1.2% yearly in July, exceeding the estimated +0.9% from June’s +0.8%. All in all, statistics are aligned to BOE’s forecast for a short-term depression in the inflation trend, the upset of core inflation flagging the overturn.
US housing figures were also released yesterday. According to latest information, the new homes construction numbers pitched an 8-year high, pointing towards an expansion of the construction segment in the last half of this year. The housing starts went up with 0.2%, reaching an annualized figure of 1.21 million – highest since October, 2007 – from a revised 1.20 million pace in June. Yet, building permits – indicators of future activity, dropped with 16.3% reaching 1.12 million (annualized) and marking the biggest drop since July, 2008.
The yellow metal price was affected by the US data release, dropping to an intra-day low at $1,113.40 per ounce. Most of yesterday’s session, gold traded below the $1,117.26 100-MA level. Adding the Cooper fall to a six-year low and the 6% contraction of the Chinese stock (-6.15% return in the Shanghai Stock Exchange Composite Index) the bearish sentiment of Gold is overflowing the market.
