Mike had the industrial production and retail sales data from China yesterday, both of which came in below expectations.
Credit Agricole reports on the data, saying:
- Data from China was not that promising
- The data “showed a uniform weakening of growth”
- The “economy is sliding towards a new normal of 7% expansion”
BUT … there is a “silver lining”:
- “short-term indicators of demand momentum have improved;
- the housing market is showing signs of life
- and the near-record trade surplus will continue adding to growth”
- They estimate that GDP will expand by only 7.3% y/y for the current quarter
Says “the strong external sector” is suggestive of scope for yuan appreciation