China: Drop in Q3 figure to at least 6.8% expected – Rabobank

By FXStreet FXStreet (Bali) – According to Michael Every, FX Strategist at Rabobank, recent economic indicators out of China suggest that we should see a drop in the Q3 figure to at least 6.8%, and maybe lower.

Key Quotes

“Today we get an even more important potential sign-post from China: there it is a case of “will they or won’t they?” (see GDP with a psychological 6-handle.) Yes, folks, today it’s Q3 GDP, and the market consensus is that we will see a 6.8% y-o-y print, the lowest growth recorded since the 6.2% figure back in Q1 2009, which was the trough of the Global Financial Crisis. Will we really see a GDP figure below 7 again? And will some variant of 6,6,6 be the revelation that scares the animal spirits out of the markets, as in August? Further, to get all Dr. Seuss briefly, will the Chinese GDP data suggest that “sick six sticks”?”

“It’s impossible to tell. Forecasting GDP is hard enough in an economy that provides decent data, but China is really still a giant “black box”. Certainly, measures such as the Caixin PMIs (a feeble 47.0 for manufacturing and a more worrying 50.5 for services), the Li Keqiang index (just 3.1% …read more

Source:: FX Street