Before the open - 15/07

Asian stocks were given a small boost last night as highly anticipated gross domestic product (GDP) data from China slowed in line with analyst’s forecasts, allaying fears of a worse-than-expected drop in growth.

Chinese GDP growth grew at an annual rate of 7.5 per cent in the second quarter of the year, down from 7.7 per cent annual growth in the first three months. This puts first half growth at 7.6 per cent, slightly above the official government target of 7.5 per cent for the year.

But compared to the first quarter of 2013, the economy grew by just 1.7 per cent in the second quarter, against expectations of 1.8 per cent growth. Indeed, the news of a slowdown, even an expected one, is hardly good news.

Greg Gibbs senior FX strategist at RBS said in a note:

The data will do little to alleviate concerns that the Chinese economic outlook is vulnerable. The rise in second quarter growth from the first quarter is very small and on this trajectory, annual growth may get to 7 percent, but would struggle to get to 7.5 percent, unless there is a surprising rebound in the third quarter.

Meanwhile, Chinese industrial production was up 8.9 per cent (9.1 per cent expected) and retail sales were up 13.3 per cent (12.9 per cent expected). This morning, Nomura revised China's 2014 annual GDP growth forecast to 6.9 per cent from 7.5 per cent over concerns about the quality and sustainability of growth, and an expected continuation of the first reduction in the country's working age population in 20 years.

The Shanghai Composite Index climbed slightly, currently up around 0.9 per cent, while the MSCI index of Asia-Pacific shares outside Japan erased earlier losses to move into positive territory. Japanese financial markets were closed for a public holiday.

Analysts are fairly optimistic about European markets this morning. The FTSE closed its best week in six months last Friday.

Key events today:

0930: Business secretary Vince Cable speaks at the London Stock Exchange announcing reforms to corporate governance laws

0930: London mayor Boris Johnson announces latest plans for a new London airport

1330: US retail sales

1500: US business inventories