China to update on economy and Spain goes to the polls

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Hello and welcome to the working week.

From the struggling property market to lacklustre trade and industrial profits, several economic indicators for the Chinese economy are flashing red. But that will not be immediately obvious when the world’s second-largest economy publishes its second-quarter gross domestic product growth data on Monday

The headline figure should still look deceptively strong because of a low base effect, with some banks forecasting 7 per cent growth. But the underlying momentum is slowing, warn economists, raising concerns about the health of the country’s post-Covid recovery.

In Europe, polls suggest Spaniards are about to change the country’s political path when they vote next Sunday, ejecting Socialist prime minister Pedro Sánchez and installing a conservative government set to overhaul a €3bn windfall tax reviled by banks and energy companies.

The big question is whether the opposition People’s party, led by Alberto Nuñez Feijóo, can secure an absolute majority or whether it will need the votes of the hard-right Vox party to take office. If so, Feijóo will come under pressure to take more radical positions on areas from climate change and immigration to gender rights.

The focus of UK politics will be three by-elections in previously safe Conservative seats on Thursday, including Boris Johnson’s former London constituency of Uxbridge and South Ruislip. The Tories are in danger of losing the lot, fuelling fears that Rishi Sunak’s party will lose in a landslide at the general election, due in the next 18 months.

On Wednesday, eyes will be on UK inflation, which is expected to have slowed to 8.2 per cent in June, down from 8.7 per cent in May, according to economists polled by Reuters. More optimistically, the Bank of England is forecasting a decline to 7.9 per cent.

Thursday will be an important moment for Hafize Gaye Erkan, Turkey’s new central bank chief, when she announces the country’s next interest rate move. It could be one of the bank’s biggest-ever pivots. Erkan’s predecessor cut rates from 19 per cent to 8.5 per cent in two years, sparking an acute inflation crisis and placing Turkey’s currency under intense pressure. It will require a huge increase in rates to restore economic order, according to economists and investors.

Tesla is the earnings call to watch because it is one of a handful of US tech businesses — alongside Amazon, Alphabet, Apple, Meta, Microsoft and Nvidia — that have kept American stock markets rising in recent weeks. Read more about that in the Unhedged newsletter.

Tesla’s stock is up 54 per cent since it last reported results three months ago. Big price cuts have helped the electric-vehicle manufacturer gain market share and investors want to see what effect this has had on the gross profit margin.

What is your priority for the week ahead? Email me at [email protected] or, if you are reading this from your inbox, hit reply.

One more thing . . . 

The Women’s World Cup football kicks off in Australia and New Zealand on Thursday. Could this be another breakthrough moment for gender equality in the sport?

Crucial economic and company reports

Here is a more complete list of what to expect in terms of company reports and economic data this week.

Monday

• Forced-labour claims brought before London’s High Court against Dyson by 23 migrant workers and the estate of one deceased employee at the vacuum cleaner manufacturer’s Johor factory in Malaysia.

• China: Q2 GDP and June retail sales figures

• Japan: Marine Day. Financial markets closed.

• UK: Rightmove July house price index

• Results: DFS Furniture trading update, Oxford Nanopore H1 trading update

Tuesday

• Canada: June consumer price index (CPI) inflation rate figures

• UK: Kantar grocery market share figures and price inflation

• US: June retail sales and industrial production figures

• Results: Arbuthnot H1, Bank of America Q2, BNY Mellon Q2, Charles Schwab Q2, Lockheed Martin Q2, Morgan Stanley Q2, Novartis H1, Ocado H1, PNC Financial Services Q2, Prologis Q2, Rio Tinto Q2 operations review, Swedbank Q2, Wise Q1 trading update

Wednesday

• UK: June CPI, retail price index (RPI) and producer price index (PPI) inflation rate figures. Also, Office for National Statistics UK house price index.

• EU: June harmonised index of consumer prices (HICP) inflation rate data.

• Results: Baker Hughes Q2, Goldman Sachs Q2, Hargreaves Lansdown Q4 management statement, IBM Q2, Netflix Q2, Northern Trust Q2, Severn Trent Q1 trading statement, Tesla Q2

Thursday

• General Meeting of Kingspan shareholders to vote on the proposed delisting of the company’s shares from the London Stock Exchange.

• China: loan prime rate decision

• France: June consumer confidence data

• Turkey: interest rate decision

• Results: 3i Group Q1 performance update, AJ Bell Q3 trading update, Alcoa Q2, American Airlines Q2, Anglo American Q2 production report, ASML Q2, Babcock FY, Capital One Q2, Dassault Aviation H1, Dunelm Q4 trading update, easyJet Q3 trading update, Getlink H1, Halliburton Q2, Howden Joinery H1, International Distributions Services Q1 trading update and AGM, Johnson & Johnson Q2, Kenvue Q2, Kier Group trading statement, Manpower Q2, Marsh & McLennan Q2, Nasdaq Q2, Philip Morris International Q2, Premier Foods Q1 trading update and AGM, Publicis H1, SAP Q2, SSE Q1 trading statement, Travelers Q2, United Airlines Q2, Vistry Group trading update

Friday

• Japan: June CPI inflation rate data

• Russia: interest rate decision

• UK: public sector net borrowing. Plus, official retail sales figures and GfK consumer confidence survey.

• Results: ABB Q2, American Express Q2, Close Brothers trading update, Comerica Q2, Danske Bank Q2, FirstGroup trading statement and AGM, Glencore H1 production report, Interpublic Q2, Nokia H1, Norsk Hydro Q2, Schlumberger Q2, Skanska Q2, Thales Group H1

World events

Finally, here is a rundown of other events and milestones this week.

Monday

• UN Security Council briefing on Ukraine, with British foreign secretary James Cleverly expected to chair the meeting.

• UK: Post Office Horizon IT Inquiry chair Sir Wyn Williams to submit an interim report to parliament, setting out recommendations on the three schemes designed to compensate sub-postmasters affected by the Horizon affair.

Tuesday

Wednesday

• South Korea: The Boryeong Mud Festival, one of the country’s largest summer gatherings, begins in Boryeong, a town about 200km south of Seoul.

• UK: Treasury committee takes evidence from Financial Conduct Authority chair Ashley Alder and chief executive Nikhil Rathi, following concerns about the City regulator’s supervision of Odey Asset Management and its founder Crispin Odey and on the FCA’s wider work on non-financial misconduct.

Thursday

• Australia/New Zealand: Fifa Women’s World Cup kicks off with games in Sydney and Auckland. The competition concludes on August 20 with the final in Sydney.

• UK: three by-elections in former prime minister Boris Johnson’s seat of Uxbridge and South Ruislip, in Somerton and Frome, and in Selby and Ainsty. Separately, the Conservative party is expected to name its candidate for next year’s London mayoral election.

• UK: 20,000 rail workers across 14 train operating companies are set to strike as part of an ongoing national pay dispute, repeating the walkout on Saturday. Senior doctors in England begin a 48-hour strike over pay.

• US: Comic-con International comic book festival begins in San Diego, US.

Friday

Saturday

Sunday

• Cambodia: parliamentary elections

• France: 110th Tour de France cycling race continues with the 21st and final stage, a 115.5km flat route ride from Saint-Quentin-en-Yvelines to the Champs-Élysées in Paris.

• Spain: general election

• UK: the RMT union launches what it describes as a “week of action” on London Underground in a dispute over pensions, job cuts and working conditions.