Asia

Japan’s Economy Shrinks The Most Since 2011 Quake On Tax. Japan’s economy contracted the most since the record earthquake three years ago as consumption and investment plunged after an April sales-tax increase aimed at curbing the world’s biggest debt burden. Gross domestic product shrank an annualized 6.8% in the three months through June, the Cabinet Office said. That was less than the median estimate of 37 economists surveyed by Bloomberg News for a 7% drop. Unadjusted for price changes, GDP declined 0.4%. (Bloomberg)

China's July Economic Data Points To Further Softness. China's economy showed further signs of softening in July despite a burst of government stimulus measures, suggesting more policy support may be needed to keep growth on track as a property downturn worsens. Unexpectedly weak growth in investment, retail sales and bank lending in July all pointed to growing vulnerabilities in the world's second-largest economy. The biggest surprise from Wednesday's data deluge came from credit and financing figures that showed the amount of cash flowing into the world's second-largest economy tumbled to a near six-year low in July of 273.1bil yuan ($44.34bil), about one seventh of that in June. (Reuters)

China July Property Investment Slows, Sales Drop Sharply. China's property market showed further signs of weakening in July, with real estate investment slowing and sales falling sharply despite efforts by many local governments to shore up the troubled sector. Combined with July activity data released over the past week, the figures suggest softness in the housing market is becoming an increasingly drag on other parts of world's second-largest economy. Property investment grew 13.7% in the first seven months from a year ago, down from an annual rise of 14.1% in the first half, the National Bureau of Statistics (NBS) said on Wednesday. Meanwhile, property sales dropped 16.3% in July in terms of floor space, according to Reuters calculations based on official data. That compared with a 0.2 annual drop in June. (Reuters)

India Inflation Tops Estimate In Test For Rajan Price Fight. India’s consumer-price inflation quickened more than economists estimated, adding pressure on central bank Governor Raghuram Rajan to keep interest rates elevated even after factory output slowed. The consumer-price index rose 7.96% in July from a year earlier, compared with a revised 7.46% in June, the Statistics Ministry said in New Delhi yesterday. The median estimate in a Bloomberg News survey of 43 analysts was for a 7.4% increase. Industrial production rose 3.4% in June compared with a 5.6% gain predicted in a separate survey and a revised 5% in May. (Bloomberg)

USA

Worst Retail Sales Showing In Six Months In Slow Start To Third Quarter. U.S. retail sales stalled in July as discounting by merchants such as Macy’s Inc. (M) failed to counter the effects of feeble wage growth. Purchases were little changed, the weakest performance in six months, after a 0.2% advance in June, the Commerce Department said today in Washington. Gains in sales of clothing, groceries and personal-care goods were offset by declines at department, electronics and furniture stores. (Bloomberg)

U.S. Mortgage Applications Fall In Latest Week: MBA. Applications for U.S. home mortgages fell last week as both purchase and refinancing applications declined, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 2.7% in the week ended Aug. 8. The MBA's seasonally adjusted index of refinancing applications fell 4.0%, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 1.0%. (Reuters)

Europe

Surprise Fall In Eurozone Industrial Production. Industrial production in the eurozone has unexpectedly fallen in June, adding to signs that the region's economy is struggling. Factory output fell by 0.3% in June after a drop in production of consumer goods and energy. Analysts had predicted growth of 0.3%. The disappointing result pushed the euro down against the dollar. Meanwhile, Spain saw its steepest decline in prices for nearly five years, adding to fears of deflation. (BBC)

Bank Of England Cuts Wage Forecast. The Bank of England has halved its forecast for average wage growth, saying it now expects average salaries to rise by 1.25% this year. The forecast comes as official figures showed average wages excluding bonuses grew by 0.6%. That is the slowest pace of growth since records began in 2001. However, the Bank upgraded its growth forecast for this year to 3.5% from 3.4%, and for 2015 it forecast growth of 3%, up from 2.9%. The Bank's latest quarterly economic forecast also indicated that it believed the level of spare capacity in the UK economy has narrowed to around 1% of GDP. In February, it said it believed the amount of spare capacity in the economy was within a range of between 1% and 1.5% of GDP. (BBC)

Greece’s Recession Eases As Country Nears End To Slump. Greece’s economy contracted at its slowest pace in almost six years, adding to signs that the country is set for a 2014 exit from its deepest recession in half a century as it emerges from its debt crisis. Gross domestic product declined 0.2% in the three months through June from the same period last year, its 24th straight contraction, after dropping a revised 1.1% in the previous quarter, the Athens-based Hellenic Statistical Authority said in an e-mailed statement today. The contraction is the smallest since the third quarter of 2008 and beats the median estimate of a 0.5% drop in a Bloomberg survey. (Bloomberg)

Currencies

British Pound Falls On Fading Rate-Hike Hopes. The British pound slid against the dollar Wednesday after remarks by Bank of England Gov. Mark Carney dampened expectations for an interest-rate hike. The British pound traded at $1.6690, down sharply from $1.6814 in North American trade late Tuesday. Meanwhile, the ICE dollar index, a measure of the U.S. currency against a basket of rivals, traded at 81.606 versus 81.512 in North American trade late Tuesday. The index reversed losses seen in earlier action. The dollar saw early pressure from weak retail sales data. The euro at $1.3365, barely changed from its level late Tuesday. The dollar fetched 102.43 Japanese yen, up from ¥102.24. (MarketWatch)

Commodities

Brent Rises On Supply Risks, U.S. Crude Down As Stockpiles Build. Brent crude oil rose by nearly $1 per barrel in choppy trading on Wednesday, recovering from a 13-month low as turmoil in Iraq and Libya kept concerns about potential supply disruptions in focus. The sale of several Nigerian cargoes in the West African cash crude market also gave Brent prices a lift. Ahead of the front-month September contract's expiration on Thursday, Brent crude rose $1.26 to settle at $104.28 a barrel. The session low of $102.37 was the weakest price since July 2013. The Brent contract for October delivery rose $1.17 to close at $105.06 per barrel. U.S. crude, also known as West Texas Intermediate or WTI, rose 22 cents to settle at $97.59 a barrel. Its discount to Brent CL-LCO1=R narrowed to $5.21, the lowest in almost three weeks, earlier in the session, before widening to settle at $6.69. (Reuters)

Gold Prices Rise After U.S. Retail Sales Disappoint. Gold rose on Wednesday after soft retail sales pointed to some loss of momentum in the U.S. economy, reducing fears among bullion investors that the Federal Reserve may raise interest rates sooner than expected. Spot gold was up 0.3% at $1,312.60 an ounce by 2:35 p.m. EDT (1835 GMT). Among other precious metals, silver was down 0.2% at $19.81 an ounce. Platinum eased 0.1% to $1,460.80 an ounce, while palladium gained 0.5% to $877.20 an ounce. (Reuters)