China's NBS: Impact of Middle East conflicts on China is relatively small

Sagar Dua FXStreet

China’s National Bureau of Statistics (NBS) deputy head has stated during the Asian trading session on Thursday that the economy has started 2026 on a promising note despite a severe external environment that is hard won. These comments came after the release of the Q1 Gross Domestic Product (GDP) data, which showed that the economy grew at a faster-than-expected pace of 5% Year-on-Year (YoY).

Remarks

Impact on China's economy from global oil price volatility is relatively small.

Recovery in China's producer prices will have a positive impact on corporate profits.

Improving produce prices are driven by both changes in domestic supply and demand and higher global oil prices.

Middle east conflict will have some impact on China's exports.

China able to maintain relatively fast economic growth despite Middle East conflict.

China's economy faces some difficulties and challenges as global uncertainties are expected to increase

Domestic demand contributed to 84.7% of Q1 GDP growth.

Economic Indicator

Gross Domestic Product (YoY)

The Gross Domestic Product (GDP), released by the National Bureau of Statistics of China on a monthly basis, is a measure of the total value of all goods and services produced in China during a given period. The GDP is considered as the main measure of China’s economic activity. The YoY reading compares economic activity in the reference quarter compared with the same quarter a year earlier. Generally speaking, a rise in this indicator is bullish for the Renminbi (CNY), while a low reading is seen as bearish.

AUD/USD eases from one-month high; holds above 0.7000 amid softer USD

AUD/USD pulls back slightly after hitting a fresh one-month high in the Asian session on Monday as bulls turn cautious ahead of the latest Australian consumer inflation figures and the crucial FOMC decision later this week. Meanwhile, expectations of another RBA rate hike in November support the Aussie. Moreover, a softer US Dollar helps the currency pair hold above the 0.7000 psychological mark.

USD/JPY extends recovery from one-month low beyond 157.00

USD/JPY kicks off the week on a positive note, building on Friday's modest bounce from the 156.00 neighborhood, or a one-month low amid some repositioning ahead of key central bank events and data risks. The Fed and the BoJ will announce their policy decisions on Wednesday and Friday, respectively. This, along with the release of Advance US Q3 GDP and the PCE Price Index on Thursday, should provide some meaningful impetus to the currency pair.

Gold struggles below $4,000 as oil-driven inflation fears reaffirm Fed hike bets

Gold attracts follow-through selling at the start of the new week, trading below $4,000 during the Asian session and near a three-month low. Higher energy prices continue to fuel inflation fears and reinforce US rate-hike expectations, undermining the non-yielding bullion. Bears, however, might refrain from placing aggressive bets ahead of the crucial FOMC meeting and other key central bank events this week.

Week ahead: Central bank and earnings bonanza could roil markets

After joining the rate-hike club in September, the Federal Reserve looks set to stand pat in October, waiting to assess more data before deciding to hike again. Whilst this isn’t an unusual move for a central bank, it somewhat contradicts Fed Chair Kevin Warsh’s new mantra of data dependency and zero forward guidance.

CFTC Report: WTI rally runs ahead of positioning

The week in one sentence: WTI prices surged while speculative longs were cut in the week to October 20, creating the clearest price/positioning divergence. Sterling and the Canadian Dollar led the constructive currency shift, while Yen longs also rebuilt. Speculators turned less constructive on the WTI, reducing their net exposure to around 89.3K contracts.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.