Focusing on China's GDP data via ING
China's GDP figure for y/y came in better than expected at 6.4% vs 6.2% expected.
Industrial production data surprises
This figure was the surprise jumping to 8.5% y/y from 5.7% in February. This jump was driven by infrastructure project and 5G production. On infrastructure plans driven nby the fiscal stimulus the production of cement grew 22.2% y/y in March which was a big beat on the previous reading of 0.5% previously. Transportation equipment grew 13.6% in March compared to 10.9% y/y in Q1 2019. Telecommunication production growth was 10.2% 7/y in March vs 7.8% growth in the first quarter of 2019. See the industrial production chart below:
ING see the impact of fiscal stimulus on infrastructure projects and 5G infrastructure production carrying on for the rest of 2019. They see retail sales and consumption slowing on the increased uncertainty of a US trade deal. However, the assertions that a deal could be signed before May is encouraging for retail sales and consumption moving forward. They raise their GDP growth forecasts in 2019 from 6.3% to 6.5%. They also see the USD/CNY tracking the dollar index in 2019 and forecast USD/CNY at 6.75 by year end.
