Better Data From China
While the markets have been focused on the Fed nearly entirely, the blackout period has now officially started and it’s time to shift at least some of the focus somewhere else.
China was on top of the agenda early this year but managed to sooth slowdown fears since then. Today’s data seems to fit that pattern with all 3 monthly figures above the consensus:
- Industrial output +6,3% y/y, consensus 6%, previously 6%
- Retail sales +10,6% y/y, consensus 10,2%, previously 10,2%
- Fixed assets +8,1% y/y, consensus +7,9%, previously 8,1%
These reports are hardly game changers but decent data turns attention away from China and that seems to be the goal of Party officials. Following a major credit stimulus from early 2016 the latest data showed less of it but it seems like the impact is still there. The whole structural picture for China does not change – major structural issues of overcapacity and massive private debt remain unresolved and pose a significant risk to global markets and the economy. But for now these fears have faded helped by a fore mentioned stimulus and controlled depreciation of the yuan.
Despite the data the Australian dollar is the weakest G10 currency now declining 0,53% against the USD and 0,57% against the NOK (the strongest in G10).
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