Markets start the week with a predominantly positive sentiment, which can be attributed more to capital inflows than stronger macroeconomic indicators.

There is some concern about China, where manufacturing PMI fell to a 15-month low of 50.3 in July, clinging to growth territory above 50 as one indication of a slower credit impulse in recent months.

But that hasn't stopped China's markets from finding buying support after July's decline. On Friday, the SEC upset markets by suspending Chinese IPOs on US exchanges, but it clarified that Chinese companies would be able to list in the US, citing risks of government interference in business in the documents. And the Politburo meeting confirmed its intention not to ban foreign listings.

On balance, we see more facts that China has overreacted in previous months, fearing economic overheating. The authorities are becoming increasingly aware of the need to loosen the screws and soften the rhetoric. At least Politburo is not willing to completely squeeze capital from the free markets.

In addition, investors can still rely on consumers who continue to accumulate capital. Taiwan has announced its intention to start distributing e-coupons to the public. And in Hong Kong, such coupons for $645 have been distributed from August 1st.

American consumers also have no visible problems with spending. They were up 1% in June, with income up 0.1%. But don't be daunted by these numbers. Last month, 9.4% of income was put aside for savings, still well above the average of 7.8% in the year before the pandemic, having saved $1.8 trillion in the last 16 months.

The savings built up and the continued higher savings rate make it possible to look optimistically into the near future without fearing a sharp drop in spending. Spending is growing faster than income, but there is still considerable room for an increase.

This week's focus is on reports from the US, with ISM manufacturing coming out today and services on Wednesday. On Friday, the July employment report is expected to show a 900K increase in employment, reducing the pandemic employment fall to 6.7M.

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