“Mixed Chinese Economic Data Highlight Weak Consumer Demand and Growing Trade Risks, Fueling Stimulus Speculation.”, – WRITE: www.fxempire.com
In Contrast, Industrial Production Accelerated, Rising 6.8% Yoy In June, Up From 5.8% in May. This Uptick Aligned with China’s Caixin Manufacting Pmi, Which Climbed Above the 50 Neutral Level in June.
Despite Subdored Consumer Activity, The Pickup in Private Sector Output Bolstered China’s Economy. The Economy Expanded by 5.2% Yoy In Q2, Below Q1’s 5.4% But Above Beijing’s 5% Growth Target.
Trade Data and The Tariff Landscape The Latest Figures Followed June’s Trade Report, WHICH SHOWED SIGNS OF IMPROVING EXTERNAL DEMAND. Exports Rose 5.8% Yoy in June, Up from 4.8% in May, While Imports Recovered, Climbing 1.1% (May: -3.4%). The Trade Report Highlighted China’s Adherence to the 90-Day US TRADE WAR TRUCE.
Crucialyly, Rare Earths Exports Surged 60.3% Yoy to 7.742 tons in June, The Highest Since 2009. June’s Surge Starkly Contrasted with May, Who Rare Earth ShipMents 74 Exports to the us. China Agreed to Ease Restrictions on Rare Earth Exports in June.
Although Tariffs Remain, The May 8 Trade Agreement Seemingly Eased Trade Tensions. Exports to the US Fell by a More Modest 16.1% Yoy Versus A 43% Slump in May.
Vietnam Agreed to A 40% Tariff on Transhipments to The Us, While Indonesia Faces A 32% Levy, Effective August 1. The Tariffs Likely Target China’s Efferts to Rereuts, Po. Manufacturing Sector and Company Profits. Weaker Profits May Further Impact Labor Market Conditions, Complicating Beijing’s Effrts to Bolster DOMESTIC DEMAND.
David Scutt, Market Analyst at Stone X, Underscored The Potential Impact of Higher Tariffs on Demand, Stating:
“China Still Making a Whole Lot of Stuff that Will Need to be Sent Somewhere Given Persent Weakness in Domestic Demand. Hardly Sems Sustainable.”
Retail and Deflation Concerns While the manUfacting strengten, Deflation Could Accelerate in the Near Term. Consumer Prices Fell 0.1% Mom in June, and Producers Reported Sharper Declines than in May, Reflection Increating Competition. June’s Weker Retail Sales May Fueli Deflationary Pressures, Further Impacting Company Profits. Corporate Profits SLID 9.1% YOY IN MAY. June’s Private Sector Pmis Highlighted A Profit Margin Squeze As Firms Cut Selling Prices to Stay Competitive.
Combined with Tariff-Related Headwinds, The Data May Push Beijing to AnnaUnce Further Stimulus to Stabilize Demand and Counter External Shocks.
Hang Seng Index Eases Back From Morning Highs Investors Reacted to Today’s Chinese Data, Which Raissed Concerns About Tariffs, Domestic Consumption, and Beijing’s 5% GDP Target.
The Hang Seng Index Was Up 0.37% to 24.293 in the morning session, Down from An Early High of 24,556. However, Mainland China’s Markets posted Mixed Performances. The CSI 300 Gained 0.22%, While the Shanghai Composite Index Fell 0.36%. Hopes for more stimulus from beijing cushioned the Losses for Shanghai Composite Index, While Bolstering Demand for Hang Seng Index and CSI 300-Listed Stocks.