According to Arjen van Dijkhuizen, Senior Economist at ABN AMRO, China’s recent data point to a further gradual weakening of momentum, but there are signs that policy easing is starting to kick in.
“In line with our expectations, investment growth picked up to 5.8% yoy ytd in October (September: 5.4%). That mainly reflects the recovery of stated-led investment on the back of fiscal easing policies.”
“Over the past months, Beijing ordered local governments to issue more special purpose bonds to finance local infrastructure projects, while the banking supervisor cut risk weights for local government bonds. Industrial production edged up marginally, to 5.9% yoy (September: 5.8%). By contrast, retail sales slowed to 8.6% yoy (September: 9.2%), the slowest pace in five months. That likely reflects some statistical factors, such as the timing of the mid-autumn festival holidays and possibly some households holding back spending in the run-up to ‘Singles Day’ on 11 November.”
“All in all, Bloomberg’s monthly GDP estimate continued its gradual decline, falling to 6.6% yoy in October.”
“We expect the PBoC to continue taking measures to prop up lending, including further cuts of bank RRRs.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.