(14 MARCH 2018)DAILY MARKET BRIEF 2:Chinese Retail Sales growing at a slower pace

Following recent reforms in Chinese Government and growing regulatory power of People’s Bank of China with the aim of improving stability either from a political and financial standpoint, today’s economic data release of February Retail Sales and February Industrial Production are given at 9.70% (previous: 10:20%) and 7.20% (previous: 6.60%) respectively. These recent releases provide clear signs of a slowdown as to the consumption of goods and services within the country while industrial production continues its rise at a constant pace, boosted by electric utilities (+13.30%) and manufacturing activities (+7%).

Recent releases of February Trade Balance (USD -5.70 billion) and February Producer Price Index (3.70% against 4.30 in previous month) confirm the tendency of a slowing economic growth, suffering from sharp headline inflation (2.90%, its highest rate since 2013). Another growing issue regards existing shadow banking business valued at USD 70 trillion and confirming the need of stringent and rapid reforms, in order to avoid any debt crisis in the near term.

Markets reacted rather softly following recent reform announcements as Chinese Hong Kong Hang Seng and Shanghai Composite were trading flat, losing steam following recent Trump’s administration personnel shakeup on Tuesday (Hang Seng: -1.70%, Shanghai Composite: -0.89% since Monday).

By Vincent Mivelaz