Toy train connecting Europe and China. Source: Adobe Stock
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The week kicked off with China issuing new long-term bonds to raise ¥1T yuan in a bid to revive its economy, according to Reuters. In my view, it feels like people have been waiting for Chinese stimulus since late 2022. So far, nothing the Chinese government has introduced to date has worked.

Still, JP Morgan on Tuesday said it was “tactically bullish” on the country’s stock markets – when the CH50 index was up over 3% MoM (but conversely down about -4.5% YoY.) Still, a MoM gain isn’t worth nothing.

I talked about China last week too, notably, with a view towards Germany and France warming their relationships with Australia’s largest and most tenuous trading partner. Interestingly, EU-to-China freight cargos are up 12% in the first four months of 2024.

Maersk shares, meanwhile, jumped close to 8% on Monday as the price of shipping from China to Europe climbed on June futures markets, due to unforeseen demand (and the Red Sea issue.)

Has Europe found a new bestie, or has China? All this talk of US tariffs is probably important to consider, here. Speaking of: Biden introduced some related to EVs and solar panels midweek.

We also got the Oz budget on Tuesday – with critical mineral spending initiatives the most relevant things for everyday ASX investors to consider. While housing initiatives were included in the budget too, it wasn’t until the US inflation read came in not-as-scary-as-it-could-be, and that made the real estate sector leader of the pack on Thursday.

Now, here’s the economics speedwrap paragraph – US inflation dominated all this week. We got USA PPI on Tuesday, and CPI on Wednesday – PPI was hotter than expected at a core YoY rate of +2.4%, which caused jitters, but CPI came in at +3.4% YoY on a headline read, suggesting a mixed story of sticky services inflation, but, an overall disinflationary journey – even if slower than expected. Helping lubricate everything was that it didn’t go above expectations.

Australia, meanwhile, released wage growth for Q1 on Wednesday, coming in at 4.1% YoY. This followed Tuesday’s ANZ data drop showing consumer spending actually increased close to 6% YoY. Australian unemployment data released Thursday, meanwhile, showed the rate hit 4.1% in April. Again, mixed, but on the whole, nothing too crazy. As above as is below: like the US, Australian job growth was pretty much only part-time roles. But whether that means anything or not remains to be seen. 

Meanwhile, the EU GDP growth rate has clocked in at +0.4% YoY and +0.3% MoM. Meanwhile, Japan’s GDP came in lower than expected at -0.5%. They get a second read like that, and the country is in recession.

But whether or not world markets actually care about what happens in Japan seems to be based on vibes at the time. As for Australia, probably more important is the Chinese data we got on Friday. 

Notably, Industrial production was above estimates at +6.7% vs +4.5% expected. So that’s good news. Chinese retail sales, however, came in below estimates at 2.3% vs 3.1% expected. If you can figure out what that means you could probably get a job at Oxford Economics.

Finally, in the background, Chinese unemployment was the least volatile of the Friday data drops: it came in at +5% vs 5.2% expected. As ever with Chinese data, we’re going to need more than numbers to fill in the shapes with colours.

Australian Equities

ASX200 soared nearly 2% on Thursday following tame US inflation read 
AFR 

BHP will need to offer Anglo over A$70B for deal to go through: analyst
West Australian

Australian Economy

Australian consumer spending increased 5.7% YoY: ANZ
ABC News

Australian budget confirms $9.3B surplus – still good, but down YoY
ABC 

International Equities

Anglo American has frozen hiring after restructure announcement

Reuters

Disney reports it’s significantly cut traditional TV spending
Reuters

USA’s legal downgrade of cannabis severity has failed to spark ETF rally
FOX 

International Economies

China issues long-term bonds to raise funds to stimulate economy: Reuters
Reuters

China-to-Europe freight train activity jumps 12% YoY
Fibre2Fashion

US consumers expected 3.3% annual CPI US growth ahead of Wednesday report
BloombergBNN

American CEOs are also expecting inflation to rise
Cleveland Fed

US home prices up 47% since 2020: Fox News
FOX 

Japanese import prices up over 6% YoY due to weaker Yen
CNBC 

Swiss consumer sentiment flat YoY
Forex Factory

Commodities

Australia, Sth Korea most likely partners for USA’s China-free critmin supply: S&P
S&P Global 

Morningstar expects microchip supplies to stay tight through 2024
CNBC 

The US “fracklog” has increased for the second month in a row as oil stays low-ish
World Oil

Geopolitics & high-impact names

Korean export bank says the country won’t beat China at shipbuilding
HSN 

Melinda Gates pulls out of the Gates Foundation started by ex-husband Bill
IB Times

OpenAI unveils new AI model reportedly capable of real-time voice chat
Reuters

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