AUD Traders Looking at China’s Failed Economic Rebound
Today expectations were for a jump in China's GDP but a slowdown in Industrial Production, Retail Sales and Fixed Asset Investment
China’s economic performance has been receiving significant attention lately, with concerns over the sustainability of its recovery and questions about the extent of government intervention through stimulus measures. Recent headlines have been reflecting ongoing worries about the health of China’s economy and uncertainties surrounding the government’s willingness to implement further stimulus measures. This week’s economic indicators, such as Q2 GDP, industrial production, fixed asset investment, and retail sales figures, will be crucial in assessing the current state of the Chinese economy and its potential for further growth.
Persisting fears about the economic recovery could create cautiousness among investors and may impact their investment strategies. The uncertainty surrounding the government’s approach to stimulus also adds to the complexity of the situation.
With global markets being closely connected and interdependent, any potential slowdown or difficulties in China’s economic recovery could reverberate through the international financial landscape, affecting various asset classes and investor sentiment worldwide. This means that risk assets such as commodities and commodity dollars, particularly the AUD will have a tough time ahead.
Earlier today we had a round of data from China, starting with the GDP Q/Y which was expected to show a 7.2% expansion from 4.5% previously, followed by Industrial Production, Retail Sales and Fixed Asset Investment, all of which were expected to show a slowdown. The GDP came in better than expected, but it was a mixed report overall, with Retail sales coming below expectations while industrial production exceeded expectations.
China’s GDP Report
- China Q2 GDP QoQ +0.8% vs 0.5% expected
China’s National Bureau of Statistics (NBS)
- National economy showed good momentum of recovery in H1 of the year but adds that the foundation of the domestic economic recovery is not solid.
- China is confident and capable to achieve economic growth targets
- Economy expected to improve more
- Economy is gradually recovering from the pandemic effects
China Retail Sales and Industrial Production
- June Retail Sales YoY +3.1% vs 3.2% expected
- Industrial output +4.4% vs 2.7% expected
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