SINGAPORE (Dow Jones) – China had better give us some good news on Thursday.
After all, it’s been China of late, with its slightly more reassuring economic data, that’s helped spur gains in Asian markets.
It’s been China that’s helped us take the “less down is the new up” approach: Incremental improvement is better than nothing.
What we’ve been hearing from China is that lending has continued to jump, though most analysts doubt this can last. What we’ve been hearing from the rest of Asia is that exports to China are starting to exhibit a bit of a recovery.
That’s helped markets overlook the overall weakness in things like gross domestic product, industrial output and trade.
Indeed, Singapore’s Straits Times Index managed a 1.1% gain Tuesday, even after lousy first quarter GDP data and the government’s downward revision of its GDP forecast for 2009 to a contraction of between 6% and 9%, from a previous range of between 2% and 5%.
Investors chose to focus on March exports data which suggest that, like Korea and Taiwan, the country is finding some support from demand from China.
But markets risk putting all their eggs in one basket. First we were pinning our hopes on things picking up in the U.S. - now we’re pinning our hopes on things picking up in China.
The danger is if data from Beijing don’t continue to deliver, we’ll get the trigger for what some people say is an inevitable correction in the recent spurt in risk appetite in currencies, stocks and metals alike.
Thursday brings a slew of first quarter data from China, including GDP.
A Dow Jones Newswires poll of economists expects GDP to have risen 6.0% on the year, from 6.8% in the fourth quarter of 2008.
That’s a seven-year low, but still pretty okay growth as far as most of the rest of the world would be concerned.
And expectations are high for some good news on an on-quarter basis (the government doesn’t issue on-quarter figures but most economists extrapolate from the official data). Deutsche Bank economist Jun Ma tips annualized, seasonally-adjusted, on-quarter growth of 6.8%, from an estimated 1.5% in the fourth quarter.
Other data on tap Thursday, including fixed asset investment, industrial output and the consumer price index, are also widely forecast to be supportive for the growth outlook.
With markets so tilted towards good news Thursday, the onus is on Beijing to come to the party - or risk bursting the balloon.
1 comment:
China Needs To Keep The Party Going
By Rosalind Mathieson
15 April 2009
SINGAPORE (Dow Jones) – China had better give us some good news on Thursday.
After all, it’s been China of late, with its slightly more reassuring economic data, that’s helped spur gains in Asian markets.
It’s been China that’s helped us take the “less down is the new up” approach: Incremental improvement is better than nothing.
What we’ve been hearing from China is that lending has continued to jump, though most analysts doubt this can last. What we’ve been hearing from the rest of Asia is that exports to China are starting to exhibit a bit of a recovery.
That’s helped markets overlook the overall weakness in things like gross domestic product, industrial output and trade.
Indeed, Singapore’s Straits Times Index managed a 1.1% gain Tuesday, even after lousy first quarter GDP data and the government’s downward revision of its GDP forecast for 2009 to a contraction of between 6% and 9%, from a previous range of between 2% and 5%.
Investors chose to focus on March exports data which suggest that, like Korea and Taiwan, the country is finding some support from demand from China.
But markets risk putting all their eggs in one basket. First we were pinning our hopes on things picking up in the U.S. - now we’re pinning our hopes on things picking up in China.
The danger is if data from Beijing don’t continue to deliver, we’ll get the trigger for what some people say is an inevitable correction in the recent spurt in risk appetite in currencies, stocks and metals alike.
Thursday brings a slew of first quarter data from China, including GDP.
A Dow Jones Newswires poll of economists expects GDP to have risen 6.0% on the year, from 6.8% in the fourth quarter of 2008.
That’s a seven-year low, but still pretty okay growth as far as most of the rest of the world would be concerned.
And expectations are high for some good news on an on-quarter basis (the government doesn’t issue on-quarter figures but most economists extrapolate from the official data). Deutsche Bank economist Jun Ma tips annualized, seasonally-adjusted, on-quarter growth of 6.8%, from an estimated 1.5% in the fourth quarter.
Other data on tap Thursday, including fixed asset investment, industrial output and the consumer price index, are also widely forecast to be supportive for the growth outlook.
With markets so tilted towards good news Thursday, the onus is on Beijing to come to the party - or risk bursting the balloon.
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