China data to come - more previews of Q4 GDP and more
There is plenty on the economic calendar due from Asia today, including Australian jobs and Chinese data
Bank of Montreal:
- Consensus is calling for broader economic growth to slow from 6.8% in Q3 to 6.7% in Q4, which would mark the smallest gain in just over a year, though, broadly speaking, in line with the average pace over the past three years. Rare is the day when this release surprises consensus.
- For 2018, officials are targeting growth of "around 6.5%" (we are a bit higher at 6.6%), with momentum easing as the PBoC slowly lets market forces have a bit more influence on the yuan, allowing it to strengthen further. That process started earlier this month when it stopped using a "countercyclical adjustment factor" to help calculate the CNY's daily value. The central bank could easily step back in to guide the currency if there is too much volatility, but they are headed in the right direction. China's regulators will also continue to cool lending activity at shadow banks (not a bad thing), which will dampen economic growth as well in 2018.
Commonwealth bank of Australia:
- Chinese GDP remains solid because of domestic demand and a recovering world economy supporting Chinese exports. According to Xinhua News Agency, Premier Li Keqiang said the Chinese economy expanded by 6.9% in 2017
- Q4 GDP on Thursday would normally be the main item, though there may be less of a reaction to it following Premier Li's comments that GDP growth was about 6.9% in 2017 - note consensus which predates the comments sits at 6.8% for the YTD.
- Given that, more interest is likely to be on the monthly trio of Retail Sales, Fixed Assets and Industrial Production - all expected to be similar to last month's growth rates.