Added - I've reworked this article somewhat, and left in a lot of what is not strictly relevant. I've left it in for context. By all means skim the first part of that article quickly, its there just for context - the more relevant education substance is from the chart down.

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We had some data from China hit late yesterday. Mike snagged it, but I just wanted to have a look at it also.

The data:

April Industrial Production +5.9%y/y

  • expected 6.0%, prior was 5.6%

April industrial production YTD 6.2% y/y

  • expected 6.3%, prior was 6.4%

April Fixed Assets (excluding rural) YTD 12.0% y/y ... slowest since late in 2000

  • expected 13.5%, prior was 13.5%

April Retail Sales 10.0%y/y

  • expected 10.4%, prior was 10.2%

April Retail Sales YTD 10.4% y/y

  • expected 10.5%, prior was 10.6%

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All the data in below expectations.

And ...

  • Fixed-asset investment, excluding rural households for April (Not YTD, like the figure above) is at 9.6% - which is the slowest since December 2011

The Wall Street Journal gathered some comments from economists and analysts on the data:

Louis Kuijs, RBS:

  • We think the risks of a more pronounced downturn in real estate and a material decline in infrastructure investment have receded, in part because of recent actions and plans of policymakers
  • However, in our view, the risks of more spill-over of the weakness in industry onto the broader economy have increased
  • A potential sharp correction on China's stock markets could have economic impact and consequences for financial instability

Minggao Shen, Serena Wang, Citigroup:

  • The planned investment for newly-started projects only grew 0.2% year on year in Jan-Apr, down by 5.9 percentage points from the first quarter, suggesting a weak investment growth outlook in coming months ... remains the key drag on growth in the near-term

Liu Li-Gang, Zhou Hao, ANZ

  • Housing sales in top-tier cities increased significantly in April, which could accelerate property investment growth in the coming quarters

Zhao Yang, Nomura:

  • The property sector is still digesting the high inventory and focusing on ongoing projects. The investment slowdown will likely continue for some time to come.
  • Infrastructure investment growth was actually not bad
  • Government's easing measures since the fourth quarter of last year are showing some positive effects

Julian Evans-Pritchard, Capital Economics

  • We think a sharp slowdown over coming quarters can be avoided
  • Despite further confirmation of a weak start to the second quarter in today's data, we remain optimistic that the government's annual growth target of "about 7.0%" can be achieved

That's a quick summary of the piece, more at the link if needed.

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Some will look at this China data and ask, if its so weak why is the AUD/USD up so much overnight?

If you have that question, good. I have 2 answers, hopefully they help and can be viewed as a learning opportunity.

1. AUD/USD is a currency pair, it will be influenced by AUD-related factors and also by USD-related factors. A key factor for the USD overnight (weakening it) was the (US) Retail Sales data coming in flat, below expectations (More on the retail sales data here and here).

2. yep, that data from China 'should' have been an AUD negative ... but it went up! When a trading instrument doesn't behave as it 'should' (I put should in inverted commas for a reason) its often evidence of investment flows ... in this case buying of AUD. Not always, but often. And its evidence, not be all and end all.

ps. the AUD/USD move overnight was much more 1 than 2 in this case.