Daily BriefsMacro

Daily Brief Macro: CX Daily: New Battle Lines Emerge in China’s Shifting NEV Market and more

In today’s briefing:

  • CX Daily: New Battle Lines Emerge in China’s Shifting NEV Market
  • A Tale of Two Systems
  • EA: Inflation Impulses Diverge in Aug-22
  • UK: Post-Prime Retail Sags

CX Daily: New Battle Lines Emerge in China’s Shifting NEV Market

By Caixin Global

  • NEVs / In Depth: New battle lines emerge in China’s shifting NEV market. 

  • Foreign affairs / Xi and Putin vow to have each other’s back. 

  • Drought / Central China’s Hunan province faces severe drought. 

A Tale of Two Systems

By Mark Tinker

  • Central to Market Thinking is the notion that there are Three Tribes at work in markets – the short term leveraged traders, the medium term asset allocators and risk managers and the long term investors.
  • Sometimes they all move in harmony, making for powerful momentum markets, but more often they move in some form of discord.
  • Understanding which of the tribes is driving markets at any time is thus central to Market Thinking.

EA: Inflation Impulses Diverge in Aug-22

By Phil Rush

  • EA HICP inflation was revised up by 6bps in the final print for Aug-22, although that was masked in the rounding at 9.14%, unlike the surprise HICPxT rise to 9.3%.
  • Underlying inflationary impulses diverged in August as France surged ahead of slowing Germany. Meanwhile, Italy picked up, and Spain eased.
  • Fiscal support should help truncate the upside in EA inflation, allowing base effects to work through. Still, the ECB hawkishly faces a worryingly resilient core pressure.

UK: Post-Prime Retail Sags

By Phil Rush

  • Payback was brutal in August after retail sales relied on Amazon Prime Day sales for buoyancy in July. All the main sectors fell m-o-m for the first time since Jul-21.
  • The underlying trend decline remains intact and has now broadly reversed the rotation from covid, but with sales volumes still collapsing at about a 5% annualised pace.
  • High inflation and rates are continuing to crush real incomes and sales volumes. More forceful rate hikes risk driving a recession as bleak as consumers already feel.

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