The publication of the last batch of Chinese hard data painted a better-than-expected picture of the country’s economic situation. Investors have increasingly worried that slowing growth in the world second largest economy would have a significant global impact. In addition, the trade war unleashed by Donald Trump more than a year was expected to worsen the situation. However, after a rough start into the year, data seems to suggest that the worse over. Retail sales accelerated to 8.7%y/y in March versus forecast of 8.4% and 8.2% in December (no data in January and February due to New Year holidays). Industrial production surprised the most as it jumped 8.5%y/y last month, while market participants expected an increase of 5.9%. Globally, the economic activity stabilised somewhat in the first quarter as GDP growth printed at 6.4%y/y, beating estimates of 6.3%.


 

Stay on top of the markets with Swissquote’s News & Analysis

 


Overall, we do not believe that those impressive figures indicate that the Chinese economy is out of the wood. At best, it suggests a slower pace of deceleration. The lack of reaction in both the FX and the equity market indicate that it is not much to celebrate: the yuan barely appreciated against the greenback woth USD/CNY sliding 0.30% to 6.69, while the CSI 300 edged up by 0.04%. On the other hand, it can be seen as a hard blow to the US administration that has been calming for months that the trade war hurting China badly. We do not believe those data are game changer but it could definitely put US negotiators in a weaker position.

This report has been prepared by AC Markets and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by AC Markets personnel at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Feed news

Latest Forex Analysis

Editors’ Picks

EUR/USD: Snaps four-day winning run, but bull breakout still valid

EUR/USD fell 0.28 percent on Tuesday, engulfing Monday's high and low and ending the four-day winning streak. The currency pair however, defended the former resistance-turned-support of the 200-day MA.

EUR/USD News

GBP/USD retraces from 5-week high amid fewer fresh catalysts from UK

While renewed fears of no-deal Brexit and less dovish Fed speak dragged the GBP/USD pair back from a month’s high, the Cable trades little changed near 1.2690 during early Wednesday.

GBP/USD News

USD/JPY: Bulls back in charge, re-takes 107.50

The less dovish rhetoric from a selection of Fed speakers overnight continues to aid the post-FOMC US dollar recovery, prompting the USD/JPY pair to retest the midpoint of the 107 handle despite negative Asian equities. 

USD/JPY News

Conference Board Consumer Confidence: The China syndrome

The index declined to 121.5 in June from April’s revised 131.3. A much more modest drop to 131.2 had been predicted.  “The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence,” wrote Lynn Franco.

Read more

Gold bulls target $1485/oz

Gold prices rallied in Asia but stalled and started to deteriorate in European markets into consolidation before a sell-off emerged on the back of less dovish than expected rhetoric from Fed speakers on New York.

Gold News

Majors

Cryptocurrencies

Signatures