Analysts at TD Securities suggest that China’s December data suite was a relief but the impact was likely short lived with retail sales rising by 8.2% y/y (mkt 8.1%, last 8.1% y/y) and industrial production surging by 5.7% y/y (mkt 5.3% y/y, last 5.4% y/y) beating expectation.
Key Quotes
“Q4 GDP was in line with expectations, up 6.4% y/y. The only slight disappointment was fixed assets investment, which rose 5.9% y/y (mkt 6.0% y/y, last 5.9% y/y). While not disappointing, activity is still weak. For example, retail sales ytd fell to its lowest since Nov 2003.”
“Separately, weaker manufacturing PMIs are in contraction territory and point to weakness in IP going forward. GDP is also likely to soften further over coming quarters as trade worsens. It is unlikely that targeted stimulus does much but soften the blow.”
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