china's real activity data surprised on the downside

Today, China’s real activity data came in weaker than expected, putting in doubt earlier positive signals. As already published at the end of last week, the October inflation rate had strongly shot up on accelerating food prices while non-food inflation continued to show a lack of demand.

Highlights:

  • Today, China’s real activity data came in weaker than expected, putting in doubt earlier positive signals.
  • As already published at the end of last week, the October inflation rate had strongly shot up on accelerating food prices while non-food inflation continued to show a lack of demand.
  • China’s economic outlook depends very much on the development of the trade war with the US. We assume a “Phase 1” trade deal in December with the looming tariff hike in December to be cancelled.
  • However, this will only decelerate China’s slowing and supportive monetary and fiscal policy is still warranted.

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CHINA’S REAL ACTIVITY DATA SURPRISED ON
THE DOWNSIDE

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