Friday, June 21, 2024

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Thanks for joining me. We begin the day with figures showing retail sales unexpectedly slowed in China as and the property sector remained a drag on the economy and consumer spending.

China’s key measure of consumer spending slowed down last month, national figures show, despite Beijing’s efforts to boost the economy.

Retail sales growth weakened to an expansion of 2.3pc in April, which was down from 3.1pc in March and lower than forecasts.

Consumers in China are grappling with the impact of a property market crisis, which has seen Beijing step up a programme of bond sales in a bid to revitalise the economy.

President Xi Jinping has been grappling with a vast post-pandemic property crash after a debt-fuelled boom, which investment bank Nomura estimated has left around 20 million abandoned or unfinished homes scattered across the country.

Dan Wang, chief economist at Hang Seng Bank China, said the retail sales figures are “depressed by low consumer prices and further contraction in housing sales”.

“Business and consumer confidence will remain low without policy support directly targeting family income and durable goods.”

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What happened overnight 

Asian stocks slipped after Federal Reserve officials suggested that interest rates may need to stay higher for longer even as inflation shows early signs of easing.

Data on Wednesday showed a slowdown in US consumer price inflation, which prompted markets to swiftly price in at least two rate cuts this year.

However, the excitement soon fizzled out as the latest report showed the labour market remains tight, while central bankers were still cautious about inflation.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4pc after touching a two-year high on Thursday. The index was still set for an increase of 2pc this week for its fourth straight week of gains.

Japan’s Nikkei eased 0.3pc. China stocks fell, with the blue chip gauge down 0.2pc. 

Hong Kong’s Hang Seng Index was the bright spot for Asia, touching its highest since August 2022. It was last up 0.3pc.

In New York, the Dow Jones Industrial Average of 30 leading US companies crossed the 40,000 level on Thursday for the first time. 

It rose as high as 40,051.05 while the S&P 500 and Nasdaq also hit record highs in trading yesterday before slowly losing steam and finishing the day slightly lower.

Overall, the Dow Jones Industrial Average fell 0.1pc, to 39,869.38, the S&P 500 lost 0.2pc, reaching 5,297.12, and the Nasdaq Composite index fell 0.3pc, to 16,698.32.

The yield on the 10-year Treasury climbed to 4.38pc from 4.35pc late on Wednesday.

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