Chinese economic data has in general been surprising to the downside in recent weeks - in opposition to the positive (seasonally adjusted awesomeness) of US data. However, for tonight's entertainment we have GDP at 7.4% YoY - perfectly in line with expectations (but the 7th consecutive quarter of slowing growth), Industrial Production beat modestly, Retail Sales beat handsomely (biggest beat in 18 months), and FAI beat...
- *CHINA 3Q GDP RISES 7.4% VS ECONOMISTS' EST. 7.4% :NBSZ CH
- *CHINA SEPT. INDUSTRIAL OUTPUT RISES 9.2% VS 9% ECONOMISTS' EST.
- *CHINA JAN.-SEPT. FIXED-ASSET INVESTMENT UP 20.5% VS EST. 20.2%
- *CHINA SEPT. RETAIL SALES RISE 14.2% FROM YEAR EARLIER
So, no new stimulus coming anytime soon - leaving Bernanke and Draghi all alone (and the latter is stuck waiting for Rajoy to say 'Si'). AUD lurched violently up and down; US equity futures are unmoved; and Treasury yields rose perhaps 1bps.
China GDP growth - right on target...7th consecutive quarter of slowing growth
Retails biggest beat in 18 months...
Chinese Economic Data has in general been disappointing relative to expectations recently...
China’s gross domestic product expanded by 7.4 per cent in the third quarter from the same period a year earlier, marking the seventh consecutive quarter of slowing growth in the world’s second-largest economy. China is this year on track for its weakest annual growth since 1999 <http://www.ft.com/intl/cms/s/0/8514c0dc-17af-11e2-9530-00144feabdc0.htm…; thanks to slowing domestic investment and limp demand from major export markets, particularly crisis-hit Europe, which has been the largest recipient of Chinese exports for years.
The latest reading, published by the Chinese government on Thursday morning, is well below last year’s 9.3 per cent expansion or the nearly 10 per cent average growth rate that China has notched up over the last three decades.The economy grew 7.6 per cent in the second quarter from the same period a year earlier, compared with the nearly 12 per cent growth China boasted as recently as early 2010.“China is experiencing a double-whammy – the growth slowdown is driven by weaker exports as well as domestic demand, in particular investment growth,” World Bank chief economist for East Asia and the Pacific, Bert Hofman, said last week.The quarterly reading of 7.4 per cent is lower than the government’s full-year target of 7.5 per cent growth this year but in comments published on Wednesday evening Chinese Premier Wen Jiabao said he was sure the country would meet the target this year <http://www.ft.com/intl/cms/s/0/479e537e-1860-11e2-80e9-00144feabdc0.htm… Wen also said there were signs that the economy could now be stabilising at lower levels.“Exports have gradually recovered, consumption has grown steadily, price inflation has clearly receded, the job market has been very good,” he said.
“This is far worse than most had anticipated at the start of 2012,” said Mark Williams, chief economist at Capital Economics. “But it is not a hard landing in terms that matter to China’s policy makers <http://www.ft.com/intl/cms/s/0/cc05e828-e860-11e1-8ffc-00144feab49a.htm…;. Slower growth does not appear to be generating significant job losses.”Most analysts and government officials mistakenly predicted China’s economy would start to accelerate in the second or third quarter of this year but that has not happened yet.Most economists now expect the economy to have bottomed out in the third quarter but few are predicting a strong recovery from the current slower pace.“China’s growth trajectory is likely to be L-shaped,” said Barclays economist Huang Yiping. “The potential growth rate is probably already down to 7 per cent and in the near term, employment conditions and housing prices will determine the amount of flexibility in macroeconomic policy.”