Daily Sources 7/15

1. FRANCE, GERMANY AND THE UK WORKING TO CONVINCE EU TO ADOPT 30% CARBON REDUCTIONS BY 2020

Paul Whitehead at Platts reports that France, Germany and the UK have launched an effort to convince the EU as a whole to adopt a measure calling for 30% carbon reductions by 2020. The current goal for the EU is a 20% reduction by 2020.

2. TURKISH CENTRAL BANK LEAVES BENCHMARK RATE UNCHANGED

Steve Bryant at Bloomberg reports that the Turkish central bank left its key benchmark rate unchanged at 7%.

3. CHINESE GDP GROWTH UP BY 10.3% IN THE SECOND QUARTER

BBC reports that GDP in China grew by 10.3% in the second quarter, down from the 11.9% seen in the first quarter.

"Other official Chinese figures show retail sales are growing at around 18% a year, which suggests that consumption is still rising."

Meanwhile, Frontier Markets reports that manufacturing is already switching from China to other, cheaper, locales. Michael Schuman at the Curious Capitalist notes that some economists expect China to relax lending quotas again in a second stimulus.

4. MICHAEL PETTIS ARGUES THAT A FLOOD OF MONEY TO THE US IS MORE LIKELY THAN CHINA DUMPING US TREASURIES

Michael Pettis at Chinese Financial Markets argues that the US is more likely to see a "tsunami" of foreign capital entering the country than China exercising the "nuclear option" and selling its US treasuries holdings. He says the latter cannot and will not happen. Worth reading in full.

5. JAPANESE CARBON EMISSIONS CUTS GOALS INCOMPATIBLE WITH PROJECTED INDUSTRIAL DEMAND GROWTH

Hong Chou Hui at Platts writes that a new report by a consultancy predicts that Japanese manufacturing may be forced overseas if its goal for carbon emissions reductions--25% by 2020--are to be met. Forecasts of growth in industrial power demand are incompatible with the carbon emissions goals.

6. UAE AMBASSADOR SAYS AN ATTACK ON IRAN PREFERABLE TO IRANIAN NUCLEAR WEAPONS

Alexander Smoltczyk and Bernhard Zand at Der Spiegel report that the UAE ambassador to the US said

"A military attack on Iran by whomever would be a disaster, but Iran with a nuclear weapon would be a bigger disaster."

Spiegel concludes that an axis is forming against Iran in the Middle East.

7. TWO HOUSES BEING KEPT OFF MARKET FOR EVERY HOUSE ON SALE

Yves Smith at naked capitalism reports that for every house on sale there are two houses being kept off the market, or shadow housing.

"James Saccacio, CEO of RealtyTrac, said at the current pace, more than 3m properties will receive a foreclosure filing by the end of the year, and lenders will repossess more than 1m of them. According to a report from the Toronto-based Capital Economics, the weight of the shadow inventory may contribute to a double dip in the housing market. The report found that for every home currently on the market, two homes are waiting to be sold."

8. 429,000 NEW JOBLESS CLAIMS LAST WEEK

Kelly Evans at Real Time Economics reports that there were 429,000 initial jobless claims last week.

9. INDUSTRIAL PRODUCTION UP 0.1%

Courtney Schlisserman at Bloomberg reports that industrial production rose 0.1% in June.