Weekend data from China for profits at industrial firms.
For March +13.9% y/y
January - February (combined) fell 14% (most rapid drop since fall since October 2011)
China's National Bureau of Statistics growth in firms' profit mainly helped by:
- faster production and sales
- stabilising prices of industrial products
- a lower VAT
A positive input for China-proxy trades eg. AUD.
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There is probably more of this to come in the months ahead given
- the rebound of investment in infrastructure and property investment
- ongoing effects of that VAT cut
- a broadening availability of credit
There are still negatives to contend with:
- producer deflation risks persists
- trade tension uncertainty persists also
