Early Wednesday morning, Bloomberg released an analytical piece probing China’s economic rebound from the pandemic. The report initially points to weaker business sentiment before citing downbeat car and property sales to portray early signs of the sluggish recovery in the world’s second-largest economy.
“China’s strong economic momentum eased slightly in May, as surging raw material prices squeezed profits, businesses turned more cautious and property and car sales underperformed,” said the piece.
The analysis further describes, “A global commodities rally helped boost factory-gate inflation in China to the highest level on record in May, according to Bloomberg Economics’ price tracker. Copper and iron ore prices surged to records this month, though the rally stalled in the past two weeks as China stepped-up efforts to contain costs amid inflation fears.”
FX implications
Considering China’s crucial status in the global economy, not to forget being the world’s largest commodity user, doubts over economic run-up could weigh on the commodities and also drag the market sentiment. Even so, S&P 500 Futures print 0.30% intraday gains by the press time amid receding fears of reflation and the Fed’s tapering, backed by the US Federal Reserve (Fed) officials’ comments and recently downbeat US data.
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