The latest data on the state of the labour market in Hong Kong is due on Thursday 18th which should provide some indication as to how trends in the commercial property lettings market will develop into the autumn. GDP contracted in the second quarter falling by 1.4% on the previous quarter which followed a 2% rise in the first three months of 2008.

The decline in economic output was the first in 5 years and has raised some concerns that a slowing global economy will depress economic growth further sending Hong Kong into a technical recession this year.

Trends in the commercial property market mirror the weakness in the official data. The latest RICS global commercial property survey for Q2 showed tenant demand stagnating in the office sector in Q2 whilst rising at a slower pace in the industrial market.

Rates on hold in Japan despite rising inflation

The BoJ meets on Wednesday 17th to decide on interest rates amid some signs that the economy is entering into a recession. Surveys of manufacturing show output falling in August with retail surveys pointing to negative growth in the coming months.

US tax credit could lift NAHB prospective buyers

It is intended that the direct involvement of the Treasury should help restore the functioning of the mortgage market, rebuild investor appetite for mortgage backed securities and, amongst other things, convince financial markets that the authorities are determined to address the debilitating consequences of the credit crunch. The next snapshot of sentiment in the housing sector is due on Wednesday 16th from the National Association of Home Builders (NAHB).

Euro area construction output to fall moderately

Data on euro area construction output for July is due to be released by Eurostation Wednesday 17th. In the twelve months to June, output fell by 1.9% (on a three month moving average basis) and was 4.6% below its March 2007 peak level.