The Day at a Glance | September 15 2020

The Top

· Consumption in China recovered during August and boosted growth.

· Federal Reserve will hold a meeting today and it will announce its monetary policy decision tomorrow.

· The recovery in demand for crude oil will slow down in the second half of 2020: International Energy Agency.

· Economic indicators: Sentiment among investors in Europe improved (ZEW Economic Sentiment 73.9 vs 64 prev.) and industrial production data is expected to be published in the US (-7.1% annual e. vs -8% prev.).

Economic environment

China`s recovery sped up in August after positive surprises were seen regarding retail sales and industrial production. For the first time this year, retail sales recorded annual growth in China (0.5%), meanwhile, industrial production grew 5.6% annually (vs 5.1% e.). With this, so far this year and compared to 2019, the contraction in retail sales is set at (-) 8.5% as investment has almost recovered (-0.3%) and industrial production has grown 0.4%. The most positive news has been the recovery in consumption, which had been lagging behind in the first few months after the pandemic. With a more firm recovery in domestic demand during August, expectations of recovery have improved for the world`s second largest economy, especially if it successfully keeps new COVID-19 outbreaks under control. Since July, China has allowed the reopening of entertainment centers such as movie theaters, which in August recorded a 90% level of sales seen prior to the pandemic and unemployment slightly dropped to 5.6%. The data suggests that growth in China has become more robust, even though the country is still far from reaching the observed trend prior to the health emergency.