China gloom overshadows Wall Street-led rebound By Reuters

A look at the day ahead in European and global markets from Rae Wee

A rally in global equity markets proved short-lived in Asia on Tuesday as another set of weak economic indicators from China soured sentiment and capped gains in Asian shares.

This created a mixed opening in Europe, with EUROSTOXX 50 futures pointing to a positive start while falling 0.3%.

Figures on UK wage growth and unemployment are due later in the day, just as London wakes up, where they are expected to point to a further easing of inflationary pressures.

That could pave the way for more rate cuts from the Bank of England, although next week could surprise investors given that they value only a slim chance of a 25 basis point easing.

The Fed also meets next week, and a 25 basis point cut is pretty much a done deal, so the fate of a huge 50 basis point move in the hands of Wednesday’s US inflation report.

Turning attention back to China, trade data on Tuesday showed exports unexpectedly accelerated in August but imports missed forecasts.

That followed Monday’s consumer price figures, whose rise had little to do with a recovery in domestic demand as producer price deflation worsened.

Chinese stocks struggled to catch a bid on Tuesday and fell to a seven-month low. Meanwhile, underscoring anemic consumer demand, the CIS tourism index fell to a record low.

It’s been a downtrend for Chinese stocks for months, and it’s clear that Beijing needs to do a lot more to restore investor confidence in its struggling stock market.

Rising trade tensions certainly don’t help either.

The US House of Representatives this week passed a bill that seeks to restrict business with China’s WuXi AppTec BGI and several other biotech companies on national security grounds, sending WuXi AppTec’s Hong Kong-listed shares tumbling. by over 10%.

Key developments that could influence markets on Tuesday:

– UK IOM Unemployment Rate (July)

– UK Average Weekly Earnings 3m (July)

– Germany’s final CPI (August)