FXTRADING Economic Data Summary (Asia-Pacific | 07/30)

Swiss Investor Sentiment Rebounds

According to a survey conducted by UBS and CFA Society Switzerland, the Swiss Investor Sentiment Index climbed from -25.0 in June to 10.0, returning to positive territory for the first time since the escalation of Middle East tensions in February this year. The Expectations Index, which reflects the economic outlook, rose from 2.8 to 9.5, while the Current Conditions Index increased from 2.4 to 6.7, indicating that assessments of both the current economy and future prospects improved simultaneously, with overall risk sentiment showing signs of recovery.

The survey also showed that the proportion of analysts expecting higher oil prices reached its highest level in the past 12 months, while bullish and bearish expectations for oil prices are now broadly balanced.FXTRADING Analysis: The rebound in Swiss investor sentiment indicates that market confidence is gradually recovering. However, energy prices remain a key variable influencing future risk appetite, and it remains to be seen whether the current optimism can be sustained.

Australian Inflation Continues to Ease

Australia's CPI unexpectedly fell by 0.1% qoq in the second quarter, compared with market expectations for a 0.7% increase, while annual inflation slowed from 4.1% to 3.8%. The quarterly trimmed mean inflation rate, the Reserve Bank of Australia's preferred measure of underlying inflation, rose 0.8% qoq, below the expected 0.9%. On an annual basis, it increased to 3.6%, below both the market forecast of 3.7% and the RBA's previous projection of 3.8%, providing additional support for maintaining current policy settings.

Monthly data also pointed to easing price pressures. Headline CPI rose 3.8% yoy in June, down from 4.0% in May, while core inflation remained at 3.6%, below the market expectation of 3.7%. Both the monthly trimmed mean and weighted median measures increased by 0.3%, while goods prices and tradable goods prices fell 0.8% mom, reflecting continued declines in imported goods prices.FXTRADING Analysis: The overall inflation trend continues to moderate, giving the RBA stronger justification to maintain its current policy stance in the near term. However, services inflation remains the key factor determining the pace of future disinflation.

UK Consumer Credit Remains Resilient

UK net consumer credit increased from GBP 1.7 billion in May to GBP 1.807 billion in June, exceeding market expectations of GBP 1.7 billion and remaining broadly in line with the six-month average of GBP 1.8 billion. Credit card borrowing rose from GBP 0.6 billion to GBP 0.9 billion, while borrowing through other forms of consumer credit, including car finance and personal loans, declined from GBP 1.1 billion to GBP 0.9 billion, indicating stronger short-term consumer financing demand.

Looking at the broader trend, annual consumer credit growth edged up from 9.0% to 9.1% in June, marking the highest level since July 2018. Annual growth in credit card lending increased from 12.2% to 12.5%, while other consumer credit remained unchanged at 7.6%, suggesting that household spending has remained relatively resilient despite elevated interest rates. FXTRADING Analysis: Continued growth in consumer credit indicates that UK household spending remains supported, although borrowing costs are still relatively high in the current interest rate environment.

US Consumer Confidence Weakens

US consumer confidence continued to deteriorate in July, with the Conference Board Consumer Confidence Index falling from 92.2 to 90.8. The Present Situation Index declined from 118.5 to 114.9, marking its third consecutive monthly decline, while the Expectations Index remained unchanged at 74.7, staying below the 80 level that has historically been associated with recession risk. The survey showed that consumers remain cautious about business conditions and the labor market, while expectations for economic improvement over the coming months remain subdued.

Average and median inflation expectations for the next 12 months continued to decline, while most households still expect the stock market to perform positively over the next year. Meanwhile, 61.3% of respondents expect interest rates to remain elevated over the coming year, unchanged from the previous month, reflecting the widespread view that the Federal Reserve is unlikely to shift toward monetary easing in the near term. FXTRADING Analysis: US consumer confidence remains weak, but easing inflation expectations may help relieve market pressure. Going forward, consumer spending will continue to depend largely on labor market conditions and the interest rate environment.

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