​Markets are getting used to see unflattering Chinese indicators

Written on 06/09/2023
Team UCapital 24


The market is becoming accustomed to seeing unflattering Chinese economic indicators, and the latest inflation readings were no exception. CPI and PPI numbers missed the mark, which again brings into question whether a strong Chinese recovery will materialise before the year is out.

From high youth unemployment to deflationary pressures, the People’s Bank of China has plenty of issues to address if it wants to try and get economic activity kickstarted.

The muted market reaction today to the soft Chinese numbers indicate two things – one that expectations are already lowered regarding Chinese economic indicators, and two, that hopes for PBOC stimulus are limiting moves to the downside in risk-assets.

Asian markets followed the positive Wall Street lead on Friday, with the major bourses across the region trading in green numbers. While there is some general optimism being displayed on equity markets, trading ranges are being moderated by the fact that a key FOMC meeting awaits on the calendar next week. So, there is some restraint being shown with investors leery about what we could see and hear from the Fed next week with regards to monetary policy settings.