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China’s economic slowdown has passed its worst, in the opinion of economists at ANZ Bank. The economy will recover incrementally from Q1’s low. USD/CNY trades at 7.077.

Key quotes

“China’s Q1 GDP contracted 6.8% y/y, prompting us to revise lower our full year forecast for 2020 to 1.8% (previously +4.1%).”

“We believe that a V-shaped rebound is technically feasible and is consistent with our revised forecast for China’s GDP growth at 7.9% in 2021.”

“Even though the Chinese government is unlikely to change its stance in 2020, we prefer to think ahead of the curve and be vigilant about the policy direction.”