Stocks in China fell sharply for the week amid weak economic data, a fresh coronavirus outbreak in Fujian province, and concerns over the growing debt crisis at the property developer China Evergrande. The prospect of tighter gaming regulations in Macau also weighed on sentiment. Elsewhere, most developed markets ended the week with modest losses; the American S&P 500 falling -0.6% over the course of the week. 
The pace of economic growth in China slowed in August, data this week show. Retail sales rose just 2.5% year-on-year, slower than the previous month's 8.5% pace and well below forecasts of 6.3%. Industrial production missed estimates as well with the spread of the Delta variant forcing several port closures in recent months and continued restrictions seem likely to restrain economic activity in the coming weeks. The People's Bank of China also injected large amounts of liquidity into the Chinese banking system on Friday amid growing concerns over the fate of the heavily indebted Evergrande.
US retail sales meanwhile showed a rise of +0.7% in August, despite expectations for a fall. Sales of vehicles rose despite an ongoing shortage of semiconductors. Meanwhile, the Consumer Price Index in the US levelled off in August as inflation rose +5.3% year-on-year, down from 5.4% in the previous month.
The UK’s FTSE 100 index shed -0.9% last week following its own headline inflation reading of +3.2%, the highest rate since 2012. The Office for National Statistics put much of the spike down to substantially lower restaurant and café prices last year and a meaningful increase this year. An inflation rate more than 1% above the Bank of England’s target requires Governor Andrew Bailey to write an open letter to the finance minister explaining how the central bank plans to bring it back in line.
In Europe, Germany’s DAX 30 index slumped -0.8% whilst the French CAC 40 endured further losses as it closed the week -1.4% lower. Japanese stocks meanwhile bucked the trend set by global markets and rose over the week with the Nikkei 225 up +0.4%.
The Bank of England Monetary Policy Committee meets this week, where they are not expected to make changes to either asset purchases or the official bank rate. In the US, the Federal Reserve Open Market Committee meets. Again, no immediate changes to policy are expected although investors will be paying close attention for any signals about when it might commence asset purchase tapering. Staying in the US, flash PMIs and unemployment claims are among the upcoming releases this week.
Flash PMIs for Germany, France and the Eurozone are set to be released this week. It is expected that there will be modest declines across the board although from elevated levels. In Japan, the Bank of Japan will release its latest monetary policy statement, followed by the release of CPI and flash PMI data. 
Read last week's market update
 Forex Factory - 12.09.21
 Office for National Statistics - Consumer price inflation - 20.09.21
 Forex Factory - 19.09.21
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