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China’s Economic Slowdown Hinders Asian Market Pace


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Today’s News

A flurry of economic data from China that was expected to showcase its post-pandemic bounce is quickly fizzling out. Raising expectations that Beijing needs to unveil more stimulus measures soon to shore up activity and shaky consumer confidence.

After a strong start to the year following the dismantling of tough COVID-19 measures, recent data have pointed to a sharp loss of economic momentum due to weaker demands at home and abroad alongside a protracted slump in the country’s property market, which is usually a significant growth driver.

The world’s second-largest economy barely managed a 0.5% growth in the second quarter compared to earlier months. Separate data for June is expected to show industrial output, retail sales and investment continuing to cool. Some economists have blamed the “scarring effects” caused by years of strict COVID-19 measures and regulatory curbs on the property and technology sectors – despite recent official efforts to reverse some curbs to support the economy.

Other reports are as follows:

China Data Weighs In On Asian Shares

Asian shares got off to a subdued start today as markets braced for a Chinese economic data that is predicted to underwhelm, while the season’s earnings picked up steam with Tesla on the docket. The Chinese economy is forecasted to have grown by a mere 0.5% in the second quarter, though the annual pace will be flattered by the base effects at a predicted 7.3%.

Source: REUTERS

Retail sales, industrial output and urban investment are all expected to show slowing growth, which is why markets are counting on Beijing to unveil more stimulus measures soon.

Yellen Still Eager To Collaborate

U.S. Treasury Secretary Janet Yellen declared that she was still “eager” to work with China on areas of mutual interest, including debt restructurings for poorer countries, and that multilateral development banks needed reforms before capital increases could be considered.

Source: The Straits Times

At a press conference before meeting a group of 20 finance ministers and central bankers in India, Yellen said that her visit to Beijing last week truly helped put the U.S.-China relationship on “surer footing” and that the world’s two biggest economies had an obligation to the world “to cooperate on areas of mutual concern”.

Dollar Shakes Off Bruises

A bruised dollar took a respite after suffering its worst weekly drop of the year as traders waited for the economic data and policy decisions before selling it down further. Chinese growth data and loan-rate settings are due later in the session, ahead of the U.S. retail sales and British inflation later in the week, followed by a slew of central bank meetings in the week after.

Source: REUTERS

The euro, which jumped 2.4% last week to a 16-month high, held just below that peak at USD 1.1228. The yen was also up by 2.4% last week, as it held at 138.69 per dollar.

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