As JP Morgan figures, the Chine GPD, published tomorrow morning, will be fantastic for sure…
The question is: What will be the market reaction figures are “too” outstanding? JP Morgan’s price goes south after the publication.
Some rumors in China are leaking a potential tapering and tightening before the end of the year if the growth generates strong core, and gore, inflation…
Here some questions to bear in mind :
- How big will the first-quarter bounce be? The Reuters consensus expects +19%…
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Why not aim higher? Chinese financial officials, led by Liu He, are eager to rein in some of the stimulus measures that cushioned the economy but also reversed their success in stabilising China’s overall debt levels. Liu’s team is determined to restore financial discipline and refused to embrace the “helicopter money” and other demand-side stimulus measures unleashed by major western economies such as the US.
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Will they succeed? President Xi Jinping has declared that “homes are for living in, not speculating on”… But the country’s property boom has not abated. Real estate-related investment and loan growth were up 38% and 14% yoy in the January-February period, respectively.
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Will consumption and services rebound? China’s impressive economic recovery was driven by surging industrial production, while retail sales remained relatively weak. The service sector also bore the brunt of the pandemic. This is the opposite of what Beijing would like to see. The retail sales will be published tomorrow and expected by the Reuters poll at +28% …
Base effects will be huge and Beijing still forecast a minimum a GDP growth above +6% over 2021… If we will a deceleration during the year in macro figures while the base effects are vanning, the earning growth (and more important, their revisions by the consensus) will have to take the lead…
