Click here to receive new analysis by email

Chinese GDP

China will announce its first read of Q2 GDP at 10am this morning, local time. The market consensus is pegging the number at 6.8%, a decline from the Q1 report of 7%. If, indeed expectations are met, this could signal China’s continuing economic deceleration and its first quarterly GDP reading below the 7% level since 2009. Anticipating how equity markets there will react to a ‘weak’ number may prove tricky, however, as it could mean a more aggressive push for further interest rates and RRR cuts. The central bank in China continues to enjoy the privilege of room to manoeuvre rates down a lot more. At 4.85% they are nowhere near the vicinity of the ‘zero-rate baseline’ most other major central banks find themselves handicapped by. The Chinese authorities also displayed their will to act decisively when they moved recently to cut both key lending and RRR rates at the same time; desperate measures according to critics, but nonetheless within their discretion. With the recent volatility we have seen over the Chinese stock market collapse - the ‘great margin unwind’ - there is still very much ‘work in progress’. Hence trading Chinese equities or indices around this number (GDP) may be a little more delicate. Instead, the best product to venture into for a trade behind this report may be the aussie-dollar. Just as the Chinese trade data on Monday offered movement on the aussie-dollar of decent range, the aussie-dollar could feature again later this morning. With the pair currently settled around the first support of 0.74, any expectations not met would most certainly bring about either a deeper breakdown or a bounce off this key psychological level.
IMPORTANT NOTE AND DISCLAIMERS Market Opinions Any opinion(s), news, research, analyses, prices, or other information contained on this website / document is provided as general market commentary and are from publicly available resources or otherwise obtained, and does not constitute investment advice nor does it seek to market, endorse, recommend or promote any investment or financial product. CMC Markets Singapore Pte Ltd. (Reg No./UEN: 200605050E) (“CMC Markets”) will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Accuracy of Information The content is subject to change at any time without notice, and is provided for the sole purpose of assisting traders to make independent investment decisions. CMC Markets has taken reasonable measures to ensure the accuracy of the information, however, does not guarantee its accuracy, and will not accept liability for any loss or damage. CMC offers no financial advisory services in any of the content or vouch for the veracity of any information. Distribution The content of this publication is not intended for distribution, or use by, any person in any country where such distribution or use would be contrary to local law or regulation None of the services or products referred to or mentioned are available to persons residing in any country where the provision of such services or investments would be contrary to local law or regulation. It is the responsibility of the reader to ascertain the terms of and comply with any local law or regulation to which they are subject. Third Parties CMC Markets may provide you with opportunities to link to, or otherwise use, sites and services offered through or by third-party(ies). Your use of these third-party services is subject to such terms as posted by these third-party(ies). We have no control over any third-party site or service and we are not responsible for any changes to any third-party service or for the contents thereof, including, without limitation, any links that may be contained in or accessible through such third-party service. These links are provided solely as a convenience to you. You will need to make your own independent judgment regarding your interaction with these third-party sites or services. Our inclusion of advertisements for, or links to, a third-party site or service does not constitute an endorsement of any of the representations, products or services listed therein. Important Note Each reader/recipient agrees and acknowledges that: (a) no express undertaking is given and none can be implied as to the accuracy or completeness of this document; (b) this document does not constitute in any way a solicitation nor incentive to sell or buy any Shares, Stock Options and Contracts For Difference (CFDs) and similar and assimilated products; (c) each reader/recipient of this document acknowledges and agrees to the fact that, by its very nature, any investment in Shares, Stock Options, CFDs and similar and assimilated products is characterised by a certain degree of uncertainty; that consequently, any investment of this nature involves risks for which the reader/recipient is solely responsible and liable. It is to be noted that past performance is not necessarily indicative of future results. In this respect, past performance of a financial product do not guarantee any and are not an indication as to future performance; (d) the use and interpretation of this document require financial skill and judgement. Any utilisation whatsoever by the reader/recipient, relating to this document, as well as any decision which the reader/recipient may take regarding a possible purchase or sale of Shares, Stock Options, CFDs and similar and assimilated products, are the sole responsibility and liability of the reader/recipient who acknowledges and agrees to this as a condition precedent to and prior to any access to this document; (e) as a result of the above, all legal liability directly or indirectly arising whatsoever.