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China data expected to show signs of economic stabilisation

While data due Wednesday is set to show the world’s number two economy slowed in the first quarter to an annual pace of 6.3 per cent, monthly readings of retail sales, investment and industrial output will be scrutinised for signs of renewed health.

Analysts from banks including HSBC Holdings and Goldman Sachs are among those expressing increasing confidence in the Chinese outlook. Corporate tax cuts, an upswing in manufacturing and expected progress on a US trade deal are among the factors buoying optimism.

“China’s GDP data will show the economy slowed again in the first quarter, likely to the weakest pace since 1990,” said Tom Orlik, chief economist at Bloomberg Economics. “Even so, early indications suggest March data will be more positive, as accelerating credit expansion puts a floor under domestic demand. We think the first quarter will be the bottom for the year.”

Here’s our weekly rundown of key economic events:

Asia
The Chinese economy is predicted to have slowed from 6.6 per cent in the three months at the end of last year, according to the median forecast of a Bloomberg survey. But industrial production is forecast to have grown 5.6 per cent in March and retail sales are seen advancing 8.3 per cent in the year to date.

On Thursday, Korea’s central bank is forecast to keep rates steady, while a jobs report in Australia will be closely watched – not least by the nation’s politicians who are in election mode ahead of a May 18 vote in which employment and the economy will be a key battleground.

The US
The main event is the Federal Reserve’s Beige Book, which will provide an insight into how healthy central bankers feel the economy is. Trade balance data on Wednesday, retail sales on Thursday, and a series of housing figures capped by starts and building permits on Friday will provide further clues. US-Japan trade talks also get under way in Washington.

Europe, Middle East and Africa
The top highlight in the euro-area will be the first take of the region’s purchasing managers’ indexes, due on Thursday, which will provide an update on the state of the region’s slowdown in the second quarter as the European Central Bank prepares to calibrate its new round of loans for banks. The gauge melding readings from services and manufacturing is projected to come in at 51.8 versus 51.6 in March. In the UK, four consecutive days of releases will provide a health check on how its economy is faring with Brexit. Data include asking prices for homes, inflation, unemployment and wages, retail sales and public finances.

Turkish unemployment and industrial production data will show the depth of the slowdown in the Middle East’s largest economy amid concerns about sudden drops in the central bank’s foreign reserves. Russian consumer data on Wednesday will be a test for the stats agency, whose credibility has come under scrutiny. Analysts expect Ghana to report fourth quarter GDP growth of 6.8 per cent on Wednesday; the IMF says the West African nation will be the fastest-growing economy in the world this year.

Latin America
In a key development for the region’s biggest economy, legislation to rein in government pension spending that is seen as vital to putting Brazil’s finances back in order is expected to clear a first hurdle in congress Wednesday. In Argentina, a government report Tuesday is likely to show annual inflation is over 50 per cent, a pace that means the recession-bound economy is stuck with world’s highest interest rates for now.

Source: Bloomberg

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