CHINA’S RECOVERY CONTINUED BUT A BIT SOFTER THAN EXPECTED
- China’s Q3 GDP growth picked up to 4.9% yoy, a bit softer than expected.
- However, monthly activity data suggest the recovery is still strengthening and broadening to the demand side.
- We maintain our 2020 growth forecast of 2.1% , although weaker activity in Q3 highlights downside risks. China will most likely be one of the few countries around the globe able to post positive real growth in 2020.
- Given the ongoing demand recovery, we expect the PBoC to stay on the side-lines for the time being.
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MARKET COMMENTARY: CHINA’S RECOVERY CONTINUED BUT A BIT SOFTER THAN EXPECTED
COVID-19 FACTS & FIGURES
Oxford University/AstraZeneca vaccine will undergo a new global trial as critics questioned the claim that it could protect up to 90% of people against coronavirus. Hetero, one of India’s leading pharmaceutical companies, agreed to produce over 100 million doses of Sputnik V vaccine. Brazilian president Jair Bolsonaro said he will not take a coronavirus vaccine.
THE FED REMAINS SILENT ON CHANGES TO QE AND CALLS FOR FURTHER FISCAL STIMULUS
As widely expected, the November meeting was rather uneventful: chair Powell seized the opportunity to reiterate the strong forward guidance on rates illustrated in September and to reassure on the capability of unorthodox measures to cushion a possible downturn of the economy.
CHINA’S NEW “DUAL CIRCULATION STRATEGY”
At the end of October, China approved its “Dual Circulation Strategy” which is the new five-year economic plan (2021 – 2025). The concept has been under discussion for quite some time and President Xi highlighted it already in May. In a nutshell, the concept promotes domestic demand as the central growth engine. It foresees more independent and resilient supply chains while at the same time it intends to further opening-up the corporate sector and financial markets.