Monday, September 14, 2015

China: Data showing signs of stabilization – Deutsche Bank

FXStreet (Delhi) – Jim Reid, Research Analyst at Deutsche Bank, notes that with regards to China and the data out over the weekend, while some of the headline numbers disappointed, most activity indicators have stabilised.

Key Quotes

“August retail sales edged up three-tenths last month to 10.8% yoy (vs. 10.6% expected). Industrial production was up a tenth to 6.1% yoy, although less than the 6.5% expected while fixed asset investment growth disappointed, falling three-tenths to 10.9% yoy (vs. 11.2% expected) and the lowest since 2000.”

“Investment amounts for projects under construction and newly started projects have both picked up notably and in addition, real growth of retail sales stabilised in August.”

“Meanwhile, leading indicators were supportive with property sales momentum continuing (7.2% yoy from 6.1% in July) and total funds available for investment increasing seven-tenths to 7.6% (3mma yoy).”

“The stabilisation of economic activities was driven to a large extent by fiscal policy easing. He continues to expect growth to rebound in Q4 to 7.2% from 7.0% in Q3 and does not expect the government to announce another grand fiscal stimulus package based on the latest leading indicators, although he does expect one more RRR cut.”
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