Goldilocks

Those of us weaned on Western fairy tales or Hollywood cartoons will know all about Goldilocks. She was the one who stumbled upon the breakfast porridge of a family of bears (dad, mum and baby); okay these omnivores were pretty dexterous ones. From the three plates standing on the kitchen table, the first was “too hot”, the second “too cold” and the third “just right”.

Are we seeing the same in China, with the temperature of the economy getting just right? That is, do we have a ‘Goldilocks’ economy in the wake of today’s easing of GDP growth and inflation?

Here, I particularly liked the quip from ANZ “it’s a moderation, stupid”.

Returning to the victuals theme, David Novak the CEO of YUM! Brands (KFC and Taco Bell) also said, this week, that the Company “is going long in China.”. And finally, even the august Anthony Bolton of Fidelity said conditions are in place for the resumption of a bull market in Chinese A shares; although it didn’t feel like it today.

• China GDP growth eases to 10.3% in Q2; making 11.1% for H1
• CPI eases to 2.9% in June from 3.1% in May (producers +6.4%)
• Industrial output in June (+13.7%) is weakest since September
• Urban fixed asset investment +25.5% in H1 (2009 = +33.6%)
• 3-year bill yield declines for first time in six weeks
• 7-day repurchase rate off 77 basis points in July to 1.86%
• Yuan Forwards reflect weaker appreciation bets
• China’s housing is not a bubble, says Marco Polo Pure AM
  
  Shanghai Composite:
  Today: -1.87% at 2,424.30 at close
  This week: -1.9%
  YTD: -26.0%
  
  Hang Seng:
  Today: -1.48% at 20,233.66 at close
  This week: -0.6%
  YTD: -7.4%
  
  Oil:
  $77.19
  Gold:
  $1213.80
  Euro/$
  1.2828