China’s Q3 GDP misses expectations at 6.0%
China’s Q3 GDP had been the latest to disappoint with the softest reading seen since at least 1992, although high frequency indicators broadly held up into September, providing mixed leads for markets.
High frequency Chinese data held up
Amid the escalation of US-China trade tensions into the third quarter, China’s GDP growth was seen slowing to 6.0% year-on-year, resting on the weaker end of the 6.0-6.5% forecast provided by the authorities for 2019. Even as the 6.3% H1 growth provides buffer, there is no denying that this growth slowdown trend is taking on a more apparent form through these readings.
The good news however rests with the high frequency numbers which saw September’s industrial production, retail sales and urban FAI improving from August, and mostly meeting or surpassing the consensus estimates. Signs of stabilization had presented themselves into September with various policy measures from the Chinese government having assisted in shoring up these readings. That said, the external sector remains evidently weak as shown in September’s trade data seen earlier in the week whereby both exports and imports had missed the consensus estimates. The affliction of the on-going trade dispute among others may continue to warrant the need for further and sooner support from the Chinese authorities.
Market reaction still focused on US-China trade
Post the release of the mixed readings out of China, one can see that limited reaction had been registered across the market. USD/CNH notably saw a slight dip with the release, trading around $7.0740 levels, down by a slight 0.1% for the day. While muted, the improvement in the high frequency readings coupled with the anticipation for further policy support had likely encouraged the moderate strengthening for the offshore yuan.
Comparatively, both the Hong Kong Hang Seng Index and the local Straits Times Index had traded little changed post the release. Closer to the heart of markets around the region may be the concern extended to the slew of geopolitical issues, particularly the US-China trade. Although the latest round of trade talks had reflected the intent for resolution from both parties, China’s latest remark on cancelling tariffs to end the trade war as the ultimate goal joins the list of outstanding issues the market had yet to seen resolution on. All said, the optimism instead for greater support from the authorities may nevertheless be one to join the hopes for a mini deal signing to aid Asia markets in short-term gains.
Back to Brexit for the weekend
Separately, the attention had been culminating on Brexit with the latest breakthrough of a draft deal fuelling positive sentiment for a resolution at long last. That said, there remains hurdles going into the end of the week with the UK parliament set to vote on the deal. As it is, the Northern Ireland’s Democratic Unionist Party had reflected their lack of support for the deal which could cut the chances of a passage slim. The potential for jaded parliament members to jump on this draft deal bandwagon after more than two years of Brexit discussions brings two-way risks for the currency going into the fresh week.
Rehashing on the trajectory of the GBP/USD pair since the 2016 referendum, prices had bounced between the heights of around $1.43 on optimism for a soft Brexit and the $1.20 lows on the plausibility of a no-deal Brexit. This binomial distribution like movement for GBP/USD could find better direction post this weekend’s vote.
Source: IG Charts
Yesterday: S&P 500 +0.28%; DJIA +0.09%; DAX -0.12%; FTSE +0.20%
The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100, 1.2 on the Germany 40, and 0.4 on the US 500
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100, 1.2 on the Germany 40, and 0.4 on the US 500
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.