I never have too much faith in these numbers, but China reported Q2 GDP at 1.8%, which is equivalent to about a 7.3 or 7.4% annual increase. This takes the rolling four-quarter GDP increase to 7.6%. Since we are now at the target levels, everyone anticipates that China will do more stimulating. The question is how much it can do, and what the negative consequences will be. Their last attempt had some very negative consequences, and the current government is reluctant to jump into the deep end of the stimulus pool again.

The US has now outstripped the EU as China's largest export market, so the US retail outlook assumes even more significance for China. This is not good news for China!