A wrath of Chinese economic data mostly came in below expectations and that along with heavy global bond yields was enough to drag sentiment down. China’s CSI 300 index extended its slide following the mixed economic data. S&P 500 and NASDAQ futures slid slightly but are still near record high territory. The Chinese yuan was unfazed by the economic data that mostly came in-line with expectations.
China’s domestic outlook is looking good following a better-than-expected retail sales reading. The March Retail Sales YTD year-over-year reading surged by 33.9%, higher than the 31.7% consensus estimate and 33.8% prior reading. China’s economy expanded by 0.6% in the first quarter, lower than the 1.4% estimate, and much slower than the upwardly revised 3.2% prior reading. The headline GDP year-over-year record print of 18.3% was a slight miss of the 18.5% estimate, but still a record when compared to the 15.3% rate seen in 1993.
It appears that the normalization of policy is starting to show some slowness across industrial production and property investment. The March reading of Industrial Production disappointed with a worse-than-expected decline from 35.1% to 24.5%.
China’s growth will trend lower going forward, but this mixed reading will likely prevent policymakers from tightening too quickly.
Gold
Gold prices drifted slightly lower following the mixed Chinese data but still is poised to finish above its recent trading range. Gold will strictly follow the move in Treasury yields, which means yesterday’s bullish breakout should hold.