Chinese Economy Cools

Following a strong start to the year, Chinese fundamentals are beginning to deteriorate starting with industrial production which slowed to 6.00% expansion from a year earlier through the end of August. Retail sales rose 10.10% from a year ago versus the consensus estimate of 10.50%, also marking the slowest expansionary reading this year for the category. Fixed asset investment in Chinese urban areas gained 7.80% in the first eight months of the year, slipping to the slowest rate of increase since 1999. The string of weaker than expected key economic data points in the world's second largest economy indicate that efforts to rein in credit growth are beginning to kick in. Chinese policymakers are unlikely to take their foot off the regulatory brakes given the excess capacity in the economy. The USDCNH pair is gaining early Thursday to last trade around the 6.5535-mark.

Sterling retreated from a one-month high against the Swiss Franc after British wage growth data came in weaker than forecast. Wages plus bonus for the three months ending in July gained 2.10% from a year ago, remaining unchanged from the prior months’ growth rates. Economists surveyed by Reuters had on average projected a 2.30% rise for the period. The tepid wage growth figure came despite unemployment in the country falling to a fresh multi-decade low.  The Office for National Statistics report issued on Wednesday showed that the jobless rate for the three months to July dropped to 4.30%.  Apart from marking the lowest level of unemployment in over 40 years, it underscores the UK’s impressive run of job creation since the 2008 financial crisis, beating economist estimates anticipating a steady rate of 4.40%. GBPCHF is currently hovering around 1.2750 after edging higher following Wednesday’s retreat.