In just a few hours time, markets will receive a swathe of important economic numbers from the world’s second largest economy — China — including the granddaddy of them all, September quarter GDP.
As opposed to prior GDP releases, investors appear optimistic towards what will be released today, encouraged by a noticeable improvement in Chinese economic data of late, helped in part by booming credit growth.
It all points to upside risks heading into the report, something that not only adds to the risk of disappointment should the data underwhelm, but also that the good news is already priced into financial markets before it’s even arrived.
Here’s the state of play:
- In the June quarter, GDP grew by 6.7% year-on-year, ahead of expectations for growth of 6.6% and unchanged from the March quarter figure.
- After seasonal adjustments, the economy expanded by 1.8% during the quarter, again beating expectations for growth of 1.6%.
- Growth in China’s tertiary industries – predominantly services – increased by 7.5% to 18,429 billion yuan in the first half of the year, outpacing growth in secondary (13,425 billion yuan) and primary industries (2,209.7 billion yuan) of 6.1% and 3.1% respectively over the same period.
- Looking ahead to today’s report, GDP growth is expected to remain unchanged at 6.7% year-on-year. Of the 58 economists surveyed by Thomson Reuters, forecasts range from growth of between 6.3% to 6.9%.
- The seasonally adjusted quarterly growth rate is also expected to remain steady at 1.8%.
- The year-on-year GDP figure has a curious knack of coming in around market expectations. The past seven have either been in line with forecasts or exceeded them by 0.1%. Make of that what you will.
- Perhaps adding to upside risks for the GDP figure, Chinese premier Li Keqiang said earlier this month that China’s economic performance during the quarter was “better than expected”.
- Alongside the GDP report, industrial output, retail sales and urban fixed asset investment figures for September will also be released.
- Industrial output is expected to grow 6.4% year-on-year, up from 6.3% in August, while retail sales are tipped to expand by 10.6%, unchanged from the prior reading.
- Urban fixed asset investment is forecast to have grown 8.2% between January to September compared to the same period in 2015, up from 8.1% in August.
In the absence of no data leaks, all four of these reports are scheduled to arrive at 1pm AEDT.
Business Insider will have full coverage as soon as the data drops.
You can follow me on Twitter @david_scutt — I’ll be covering the release live.
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