We had plenty of data from China today.

  • China's December home prices fell by 0.45% m/m, more deeply than November’s -0.37% and the fastest drop since February 2015. the December fall was the sixth in succession.
  • 2023 GDP hit the government target of around 5%, coming in at 5.2%. The Q4 q/q was a very slight miss
  • Economic data for December was mixed, with a miss for retail sales and a beat of industrial output
  • China’s population declined by 2 million in 2023

More on all of those in the bullet points above.

China’s National Bureau of Statistics (NBS) began publishing the youth unemployment rate again, the rate for people aged 16-24 ex-students at school was 14.9% in December.

As a round up of the year passed, annual growth of China's major economic indicators in 2023:

GDP: ↑5.2%

  • Industrial output: ↑4.6%
  • Retail sales:↑7.2%
  • Fixed asset investment:↑3%
  • CPI:↑0.2%
  • Per capita disposable income: ↑6.3%
  • Unemployment rate: ↓ to 5.2%

Bear in mind that with China in the grip of deflation and loan prime rates at 3.45% for the one year and 4.20% for the five year, real interest rates in China are much, much higher than in the US, Europe, the UK, Australia …. OK, basically everywhere. While 2024 economic growth is expected to be a challenge there is scope for both fiscal (subject to debt fears being overcome) and monetary policy (subject to fears of yuan decline and capital outflows being overcome) boost.

News flow otherwise was subdued and of no impact.

For major forex rates the dominant flow was another, though small, gain for the US dollar across the majors board.

Equities in the region fell.

In US politics, the Senate began debate on the interim spending bill. Pundits expect final passage to be likely Thursday, ahead of Friday’s deadline.

USD/JPY stayed above 147.00:

usdyen wrap chart 17 January 2024