In view of Prakash Sakpal, economist at ING, the outcome of the trade talks will be one of the key drivers for global markets next week, while delayed US tariff hikes on $250 billion of Chinese goods from the US also come into effect on 15 October.
“The situation continues to be tense and hopes of a breakthrough in the near term remain slim as the US seems to be expanding the battlefield beyond trade and technology.”
“China’s September data dump will tell us how all of this is impacting the economy. With such an adverse backdrop, GDP growth is poised to be on a steady downward slope in the third quarter and beyond.”
“A nearly two-decade low industrial production growth, 4.4% in August, would be tantamount to a recession, although that’s not reflected by the positive GDP growth as consensus forecasts 1.5% QoQ SA vs. 1.6% in 2Q. However, the consensus of just a small tick down in annual growth to 6.1% from 6.2% appears to be a tad optimistic.”