Japan GDP surges 4% in Q2

Japan’s GDP expanded 4% in the three months to June. The new figures from Japan’s Cabinet Office are the fastest growth figures for two years, suggesting Japanese consumers are finally starting to spend. Quarter-on-quarter GDP was up 1%. GDP growth has now ticked up for the last six consecutive quarters.

The news helped give Asian shares a lift generally though not the home market: the Nikkei 225 fell almost 1% following the news. North Korean-US tensions remain high and underwhelming Chinese data – lower Chinese factory output – was also a dampener.

This morning the euro is at $1.1817 against the dollar while the pound is still – just – the right side of $1.30 at $1.3007. The next bout of important data arrives tomorrow – UK consumer price index (CPI) news followed by more labour market growth on Wednesday. Expect much talk about cash-strapped UK households and, of course, Brexit…

• UK FTSE 100 7,309.96 -1.08%
• Dow 21,858.32 +0.07%
• S&P 500 2,441.32 +0.13%
• Nasdaq 6,256.56 +0.64%
• Nikkei 225 19,547.07% -0.93%
• DAX 12,014.06 0.00%
• CAC 40 5,060.92 -1.06%
• Gold 1,293.10 -0.07%
• Oil WTI 48.77 -0.10%

New RPI to set 2018 train fare price rises

So far the consensus on UK CPI is that inflation for July will come in at 2.7% compared to 2.6% in June. June’s dip was not expected, much of it on the back of lower oil prices, helping many motorists. Bear in mind that the May figure was 2.9%.

The Tuesday update is also when the figure – RPI – for calculating next year’s rail fares will be taken. It’s thought this figure will be 3.5%. Recent rising prices of goods and services include a rash of energy price hikes (think EDF, etc).

New analysis from the RMT union claims rail fares have risen by 32% in the last eight years while average earnings have increased 16%. "Government policy of suppressing workers' wages while at the same time presiding over corporate welfare on our privatised railway," RMT general secretary Mick Cash said, "has resulted in a toxic combination of fare rises easily outstripping wages."

New RPI figures fires starting gun for UK rail fares: Shutterstock

Trump readies Chinese 'trade war' probe

Back to the Chinese data mentioned at the start. Chinese industrial output slowed to 6.4% in July, some way off the 7.1% figure anticipated by many analysts. It also compares poorly with the 7.6% increase in June. On a month-by-month figure this drop deteriorates from 0.81% to 0.41%.

Industrial output is a key market of economic growth but the news stats are also indicative of the Chinese government’s attempts to ward off (growing) debt levels.

The data will be further churned up today as President Trump launches a probe – officially labelled a Section 301 investigation – into Chinese business practices, taking into account intellectual property behaviour and any practices that prejudice US business interests.

It’s not just China that will feel the heat. The Section 301 order will also take a close look at Taiwan, South Korea, Singapore and Hong Kong. But the investigation will have limited potentially to enact new tariffs, at this stage. That won’t stop many coming “trade war” headlines though.

Chinese industrial growth stutters in July: Shutterstock

Breaking news: The CEO of AIM-listed Telit Communications Oozi Cats has quit on concern about possible US fraud links. Telit has also issued a profit warning. It's thought HMRC could be losing hundreds of millions in lost revenue due to buy-to-let landords failing to declare their incomes.