A batch of April economic indicators are announced today, together with previously released trade and credit data, suggesting that the risk of growth deceleration looms large even before the escalation of US-China trade war in early May. We anticipate more monetary and fiscal easing measures to be deployed in the rest of the year in a bid to sustain growth momentum and offset intensifying headwinds from deteriorating trade relation. In our base scenario, China and the US will sort out the current quandary in this summer to avert the long-term confrontation. We therefore maintain our full-year growth projection at 6% for 2019, in line with the authorities’ range target of 6-6.5%.

April economic indicators suggest that growth slowdown is broad-based: industrial production decelerated from 8.5% y/y of March to 5.4% y/y; retail sales declined to 7.2% y/y in April from 8.7% y/y previously; fixed asset investment also decreased to 6.1% ytd y/y from 6.3% ytd y/y in March, led by manufacturing investment.

April credit data is unsatisfactory as the authorities might adopt a “wait-and-see” method given the better-thanexpected Q1 outturns. M2 growth slowed down to 8.5% y/y from 8.6% previously. Both total social financing and new yuan loans dipped to RMB 1,360 billion and RMB 1,020 billion from RMB 2859 billion and RMB 1690 billion respectively. Altogether, our BBVA MICA model yields a GDP prediction based on monthly data at 6.3% for Q2 2019, in line with the growth slowdown.

Download the full report

This document was prepared by Banco Bilbao Vizcaya Argentaria’s (BBVA) Research Department on behalf of itself and its affiliated companies (each a BBVA Group Company) for distribution in the United States and the rest of the world and is provided for information purposes only. The information, opinions, estimates and forecasts contained herein refer to that specific date and are subject to changes without notice due to market fluctuations. The information, opinions, estimates and forecasts contained in this document have been gathered or obtained from public sources believed to be correct by the Company concerning their accuracy, completeness, and/or correctness. This document is not an offer to sell or a solicitation to acquire or dispose of an interest in securities.

Feed news

Latest Forex Analysis

Editors’ Picks

EUR/USD extends gains to 1.1200 on sliding US yields, weak data

EUR/USD is trading close to 1.1200, in the wake of the European session as US yields continue falling. The European Parliament elections are in play. US durable goods fell short of expectations with -2.1%. 

EUR/USD News

GBP/USD off the highs as May announces stepping down on June 7th

GBP/USD is trading below 1.2700 after a quick rise to the upside as UK PM Theresa May announced she will step down on June 7th with Boris Johnson set to take over.

GBP/USD News

USD/JPY extends slide and looks for a test of May’s low

The USD/JPY pair dropped further ahead of the London fix on the back of a decline of the US Dollar across the board and a pullback in equity prices. 

USD/JPY News

The market may surprise on the upside in the next few hours with BTC/USD topping $8,250

We reach the end of a week can be characterized as a week of transition. After the strongly bullish days of the beginning of the month, cryptos have reached critical levels of resistance...

Read more

Gold: Bullish flag pattern spotted on 1-hourly chart

The lower end of the descending trend-channel coincides with 200-hour EMA support and should act as a key pivotal point for intraday traders. 

Gold News

Majors

Cryptocurrencies

Signatures