Gerard Burg, senior economist at National Australia Bank (NAB) points out that most of China’s indicators were relatively weak in October as in addition to the impact of the US-China trade war, they may also reflect disruptions caused by the celebrations for the 70th anniversary of the founding of the People’s Republic of China at the start of the month.
Key Quotes
“We argue that the weakness this month should not be over emphasised. Our forecasts for China’s economic growth are unchanged – at 6.1% for 2019, 5.9% for 2020 and 5.8% for 2021.”
“Growth in China’s industrial production slowed again in October – increasing by 4.7% yoy (down from 5.8% previously). This was the second weakest rate of growth in ten years (compared with the 4.4% increase in August.”
“Growth in China’s fixed asset investment slowed in October – down to 3.7% yoy (from 4.8% previously).”
“China’s trade surplus edged slightly wider for the second straight month in October – to US$42.8 billion (from US$39.2 billion previously).”
“Producer price deflation has continued to accelerate – suggesting that one impact of the US-China trade war has been for Chinese manufacturers to cut factory gate prices to support sales volumes. Producer prices fell by 1.6% yoy in October (compared with a 1.2% fall previously).”
“The People’s Bank of China (PBoC) cut the MLF rate by 5 basis points in early November – to 3.25% - which will likely be reflected in the benchmark Loan Prime Rate when it is announced on 20 November. Compared with policy easing in other countries, this cut was extremely modest, however the PBoC has scope to cut further and faster if required in the future.”
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter GDP data.