In overseas markets this week, an early spill was soon recovered, and most markets are broadly flat after 3 days trading.
More reform measures were announced in China this week, none of which on their own are material, but as part of the ongoing reform agenda are noteworthy.
Sales-tax on smaller vehicles was cut from 10% to 5%, and mortgage down-payment requirements were reduced from 30% to 25% for first time home-buyers. More railway capital expenditure was committed to as well.
With China on holiday most of this week for Golden Week celebrations, there is a sound chance the government announce a further reduction in bank reserve requirements to further free up liquidity.
Having seen August manufacturing data suggest the weakest level of activity since 2009, balancing that out this week was Chinese consumer confidence data which pushed to a near 18-month high – suggesting perhaps that the recent stock-market rout has not had too significant a knock-on effect to household confidence.
In the US, initial expectations for the August employment due this Friday were assisted by a strong ADP employment report overnight Wednesday. US consumer confidence also remains near a peak.
In Europe, the recovery continues. Both industrial and service sector confidence pushed higher in August – service sector confidence across the Eurozone is at an 8-year high, and industrial confidence at a 4-year high.
Have a great Grand Final weekend.
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