Developments in the yuan, interest rates and the stock market in China will continue next week, so lets preview Chinese Q4 GDP.
And its not just the GDP data, we'll also get industrial production and retail sales.
China December Property Prices will hit on Monday. November data showed price rises continue and as stocks slump I expect we'll see more cash pumped into property still.
But its Tuesday that brings us the big gun data for the week from China.
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All this is due at 0200GMT 19 January 2016
Industrial Production y/y
- expected is 6.0%, prior 6.2%
Industrial Production (December) YTD y/y
- expected is 6.1%, the previous was also 6.1%
Last week we saw a big improvement (again) in trade data. A big beat on the surplus and on exports. Industrial production will be watched to see if improvement is also being seen here.
Retail Sales (December) y/y
- expected is 11.3%, previous was 11.2%
Retail Sales YTD y/y
- expected is 10.7%, previous was 10.6%
Fixed Asset Investment (Excl. Rural) (December) YTD y/y
- expected is 10.2%, prior also 10.2%
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And, the huge focus is Q4 GDP .... although some doubt the veracity of the GDP especially, with accusations of official 'massaging' of the data never far away (and given the discrepancies between local data and its sum into national GDP, mainly justified). Even the Chinese Premier Li Keqiang has acknowledged the fictionalizing of the data.
To be fair, there are changes being made to data collection and interpretation at official levels which is moving the published data away from what it is wished to be and closer to reality. I'll have more on this next week.
The National Bureau of Statistics announces Q4 GDP y/y
- expected is 6.9%, prior was 6.9%
Q4 GDP SA q/q
- expected is 1.8%, previous was also 1.8%
Q2 of 2015 saw a burst of GDP growth, much of it in the financial sector as the stock market surged (remember that?), and then a deceleration in Q3 as the stock market, ahhh, didn't surge (it fell in a heap).
Expect some bounce in Q4 data although weakness in external demand (impacting on exports) will detract. The familiar woes of weak internal demand, overcapacity, persistent PPI deflation, and the overhang of property inventory will also weigh.
The consensus expectation is for 6.9% y/y growth, anything below 6.8 will ignite calls for further stimulus. Given movements in the stock market I expect we are likely to get a rate cut at any time ahead of Chinese New Year (February 8) regardless.
