From NAB's outstanding team of market economists this morning:
"There were some signs of easing growth out of Asia yesterday with a cooling in Chinese house prices growth, a decline in the volume of new lending out of China and a marked decline in industrial production growth out of India.
This followed the release of Chinese international trade data released on the weekend showing import growth softening but export growth accelerating though that owed something to exporters rushing to ship ahead of the coming expiry of export rebates for certain goods on July 15. The import data showed some recent decline in imports of some resource commodities, including copper and iron ore. Iron ore import prices out of China have continued to decline, down another 3% yesterday. At $118.10, Chinese iron ore prices are down 36.7% from the high of $186.50 reached on 21 April this year and back to the lowest level seen since the end of last year. The Chinese house prices and new yuan lending volumes data were welcomed showing that the authorities have been relatively successful in cooling house prices and credit growth without a collapse.
The Indian industrial production data showed a second monthly decline of 0.4% (+11.5% y/y) after a 10.0% monthly drop in April (+16.5% y/y). It looked bad and that may be so. But it is an especially volatile series and of course it comes only a week after the Reserve Bank of India hiked rates for the third time this year. So worthwhile keeping an eye on but it may well be noise that is re-balanced next month."
