China’s economy is set to show solid expansion in Q4. Alongside the critical GDP release, the dragon nation is set to publish its activity numbers, throwing fresh light on the consumption and production aspects. The rebound is likely to have a significant impact on the markets, FXStreet’s Dhwani Mehta reports.
See: USD/CNY to test 6.40 as downtrend remains intact – ANZ
Key quotes
“For the fourth quarter of 2020, China’s Gross Domestic Product (GDP) is expected to grow by 6.1%. On a quarterly basis, the Chinese economy is likely to expand 3.1% in Q4 after registering a 2.7% growth in the previous quarter.”
“Industrial output is likely to have increased by 6.8% YoY in December when compared to a 7% rise seen in November.”
“The December Retail Sales are seen higher at 5.5% on an annualized basis vs. November’s 5% growth. Consumer spending appears to remain strong after November’s retail sales were boosted by the ‘Singles’ Day’ shopping festival.”
“A stronger-than-expected headline GDP number is likely to lift the overall market sentiment, driving riskier assets higher. Global stocks are expected to cheer a robust expansion in the Chinese economy, with the domestic stocks and US equity futures seen benefiting the most.”
“Disappointing growth numbers could call for more stimulus efforts from the PBoC and government, keeping the declines limited in the stocks and Chinese proxies such as the Australian dollar and the kiwi. China is the top trading partner for the OZ economies.”
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