China: Growth risks rise into H2 – Commerzbank

Commerzbank's Dr. Henry Hao notes that China's July economic data fell short of expectations, particularly in industrial output, retail sales, and fixed-asset investment. These declines are attributed to weather disruptions and a worsening property market. While exports remain a positive, H2 GDP growth is now considered vulnerable and below targets, increasing pressure on Beijing to provide more substantial fiscal and monetary support in the upcoming months.

The July data misses highlight the fragility of China's second-half recovery, with persistent consumer caution and sub-target GDP growth exacerbating the need for greater policy support from Beijing. With the year-to-date GDP growth falling short of the official target, achieving a robust H2 recovery is crucial for meeting the full-year objective.

The adequacy of the planned policy response will be the key policy question for Q3. Meanwhile, the GBP/USD pair climbs above 1.3500, while EUR/USD surpasses 1.1600, driven by US dollar weakness following weaker-than-expected data. Gold continues its upward trend, trading near $4,400. Pepe shows a modest recovery after a recent decline, with mixed sentiment in the broader crypto market.

Canada's July Consumer Price Index will be closely watched on Monday for insights into price pressures following the Bank of Canada's July 15 meeting, where officials maintained interest rates at 2.25%.