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Next Week’s News Today – Last Chance Saloon

It wasn’t exactly a surprise when it happened. Greece has told the International Monetary Fund (IMF) that it will delay its next debt repayment and bundle together all four of its payments due this month.

Talks between Greece and its creditors are still on going. However, no one is any the wiser as to whether a deal can be reached, as Greece takes yet another long sip in the Last Chance Saloon.

We should find out more next week about just how well China is managing to shift its economy from export-led to consumer-led. Stock market investors have already been voting with their wallets – or should that be with their credit cards. Since the start of the year, both the United SS50China ETF (SGX: JK8) and the db x-trackers –CSI300 UCITS ETF (SGX: KT4) have climbed around 40%.

In April, China’s exports fell 6% compared to a year ago. Imports also fell. Meanwhile, retail sales ticked up 10%, which could suggest that the picture is not quite as dire as some have painted. Will it be more of the same or could be it signs of better things on the horizon?

China will also be reporting inflation numbers. Yet another month of falling consumer prices could give the People’s Bank of China some welcome wiggle-room to inject more money into the slowing economy.

Another of Asia’s biggest economy will be providing some key data for analysts to digest. Japan will report how quickly its economy grew in the first quarter. Earlier estimates appeared to show that the economy expanded at an annualised rate of 2.4% from 1.5% in the previous quarter.

Over on the other side of the globe, all eyes could be on the latest US retail sales figures. American consumers appear to be showing an appetite to spend. But probably not quite enough that would make a difference to the economy. Last month’s 0.9% growth in retail sales is lower than the long-term growth of about 4%.

The data could affect the Federal Reserve’s interest-rate meeting the following week. That should be interesting, given this week payroll data. The International Monetary has asked the rate-setting committee to wait until “more tangible signs of wage or price inflation” before hiking rates. It can ask. But I doubt if the Fed will listen.

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