EconoTicker

The week began with pessimistic data from China. Fixed Asset Investment in Jun increased by 3.9% annually, as was expected, but less than 4.0% growth in May. 

GDP in Q2 2024, increased by 0.7%, missing 1.1% estimates and less than 1.6% growth of Q1. On an annual basis, GDP growth of 4.7% in the second quarter, missing 5.1% estimates and 5.3% growth in Q1.

Even industrial production which increased by 5.3% in Jun to beat the 4.9% estimates, was less than 5.6% growth in May. 

The unemployment rate remains unchanged at 5% in Jun, the same as May. 

Chinese consumer price index in June rose 0.2% from a year ago, less than a 0.3% uptick in May, below a 0.4% increase forecasts, and the slowest in the past three months. 

On a monthly scale, CPI decreased by 0.2% to miss estimates, and PPI fell by  0.8%, as expected. 

China's Chang'e-6 probe has successfully landed in Inner Mongolia province.

He delivered soil samples from the far side of the Moon to Earth.

China left benchmark lending rates unchanged at a monthly fixing on Thursday, in line with market expectations.

The one-year loan prime rate (LPR) was kept at 3.45%, while the five-year LPR was unchanged at 3.95%.

Financial News, a central bank-backed newspaper, said in a commentary this week that China still has room to lower interest rates, but its ability to adjust monetary policy faces internal and external constraints.

China's BYD has unveiled a new hybrid car that can go from New York to Miami without recharging or refueling. The above car can cover a distance of 2 thousand kilometers with just one charge and only $14,000 USD. 

China’s industrial profits grew 3.2% year-to-date through September, accelerating from 0.9% in the previous period. The improvement highlights a steady recovery in manufacturing profitability, supported by stronger output, policy stimulus, and easing input costs. However, profit growth remains uneven across sectors, with private firms and exporters still facing weak global demand and margin pressures.

Market impact: Mildly positive for CNY; improving industrial performance signals stabilizing economic momentum, supporting cautious optimism for the fourth quarter.

China’s Caixin Manufacturing PMI slipped to 50.6 in October from 50.7 in September, missing market expectations of 51.2. The data indicate that factory activity continued to expand but at a slower pace, as external demand weakened and new orders grew modestly. Input costs rose marginally, while employment remained broadly stable, reflecting cautious optimism in the industrial sector.

Market impact: Neutral for CNY; steady but softer manufacturing momentum suggests moderate economic growth ahead.

China’s Caixin Services PMI edged up to 52.6 in October, slightly above expectations of 52.5 but down from 52.9 in September. The data show continued growth in the services sector, supported by improving business activity and stable new orders, though the pace of expansion remains moderate. Employment also rose marginally, reflecting cautious optimism among service providers amid uneven economic recovery.

Market impact: Neutral for CNY; steady services growth helps offset manufacturing softness, keeping overall economic momentum balanced.

China’s foreign exchange reserves stood at $3.343 trillion in October, slightly above expectations of $3.320 trillion. The increase reflects stable capital flows and managed currency conditions, supported by the yuan’s relative steadiness and resilient export receipts.

Market impact: Neutral for CNY; stable reserves reinforce confidence in China’s external position and FX policy consistency.

China recorded a trade surplus of $90.07 billion in October, below expectations of $96.9 billion. Exports fell 1.1% year-on-year, while imports rose 1.0%, reflecting softer global demand and modest domestic recovery. The data suggest balanced but slower trade activity, as external headwinds persist while domestic consumption and production stabilize.

Market impact: Mildly negative for CNY; weaker exports limit trade-driven inflows, though stable imports reflect steady domestic momentum.

China’s consumer inflation rose 0.2% year-on-year in October, slightly above expectations of 0.0%, marking a return to positive territory after September’s -0.3% decline. On a monthly basis, CPI also increased by 0.2%, supported by firmer food and energy prices. Meanwhile, producer prices fell 2.1% year-on-year, an improvement from September’s -2.3%, indicating easing deflationary pressures in the industrial sector.

Market impact: Mildly positive for CNY; signs of price stabilization may ease concerns over weak domestic demand and support expectations for steady monetary policy.