Focus On Domestic Demand Pulse, As July Data Prints Today

The focus today will be a host of China data prints/outcomes.

• First up is PBoC's MLF operations. The market expects an unchanged MLF rate at 2.85%, while the consensus is for 400bn yuan rolled over. Most uncertainty rests on the roll over amount, given the domestic system is flush with liquidity at the moment. The range of estimates for this print is 100bn to 600bn yuan.
• Just after this is July house price data, which is expected to edge down further by 0.10% in the month. Further weakness is in line with higher frequency property price indicators.
• Following this we get the monthly data dump for July. IP, retail sales, fixed asset investment (FAI), property investment and the jobless rate.
• The market expects IP growth of 4.3% YoY, versus 3.9% previously. Retail sales are expected to recovery further to 4.9% from 3.1% in June. FAI is expected to be firmer at +6.3% (from 6.1%) but property a laggard (-5.7% forecast, versus -5.4% in June). The jobless rate is forecast to be unchanged at 5.5%.
• To recap, the aggregate finance data from late Friday printed much weaker than expected (756.1bn yuan, versus 1350bn expected). New loans were also softer, printing at 679bn yuan, against a 1125bn forecast. The detail pointed to on-going housing and consumer related headwinds.
• This points to downside risks for today's activity data, at the margin, although the general tone to China data prints has been firmer in recent months as Shanghai emerged from lockdown, with the Citi China EASI trending higher to +30, from mid June lows of -74.