China’s Q2 GDP was a tick above consensus forecasts, coming in at 7.5% versus the estimated 7.4%. It was expected to be in line with Q1’s 7.4% growth, the slowest pace in 18 months.
The slight bounce should not have come as a large surprise, considering the stream of positive indicators ahead of the data release.
Over the past two months, manufacturing and export figures have been encouraging and pointing towards an uptick. Yesterday, there were also some signs of increased economy activity from new loans data.
In today’s round of China data, we also saw:
- Industrial production grew 9.2% in June year-on-year, compared with 8.8% in May.
- Fixed asset investment also edged up, at 17.3% in the first half of the year, versus 17.2% between January and May.
- Retail sales were largely in line at 12.4% growth in June, but slightly below May’s increase of 12.5%.
Market reaction muted
There were little significant market uplift despite the relatively positive China data, suggesting the news was largely priced in.
Interestingly, the news was a downwards catalyst for AUD/USD, which has been weakening over the past few days. The pair is now trading below its 50 daily moving average (DMA) and is testing its support at 0.9330.