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Economic Insights

US inflation remains tame in July

The US Consumer Price Index (CPI) in July stands at 0.0% m/m, 1.4% y/y increase in July, down from 1.7% y/y in June. Energy prices are lowered by 0.3% m/m, continuing the downward trend for the fourth consecutive month. Food prices grew by 0.1% m/m due to the drought in the US in the recent months, which offset the impact of declining energy prices. Generally speaking, the US CPI reflects an increasing demand during summer vacation.Source: ReutersClick the image to enlarge

If merely judging the inflation data, it still makes sense to say there is room for the Federal Reserve (Fed) to do more monetary stimulus; but together with the retail sales and employment data in July, I do not think the Fed will be further dovish in the coming Jackson Hole meeting. The core CPI, which excludes food and energy, rose 0.1 percent from June, which was the smallest increase since February.Source: ReutersClick the image to enlarge

US Industrial Output shows amazing growth

The US industrial production increased by 0.6% m/m, upped from 0.1% m/m in the previous month. Among all the components, the manufacturing sector increased by 0.5% m/m, which has been moving sideways. However an increase of 0.5 percent this round signaled a slight upward trend for the manufacturing activity. Utilities and mining sector in July grown by 1.3% m/m and 1.2% m/m respectively.Source: ReutersClick the image to enlarge

Greek Prime Minister to meet Euro Zone’s leaders next week

Greek Prime Minister Antonis Samaras is going to meet German Chancellor Angela Merkel, French President Francois Hollande and the Euro Group chief Jean-Claude Juncker. Government officials said that the key priority of this meeting is to regain the credibility by showing their determination such as pledging to the austerity agreement which has been agreed earlier. Samaras might also raise the request for extending the budget deficit target period.

For Greece, it has to deliver EUR 11.5 billion before the inspectors return in September to decide whether to release the next loan tranche and draft a key report and this report will be a key reference for the international lenders to decide whether they should continue to support Greece.