China’s weakening growth confirmed by activity data – Nomura

FXStreet (Barcelona) - With Chinese Industrial production, Fixed asset investment and Retail sales growth lowering, Asian Economists at Nomura, lower their Q1 GDP growth forecast to 6.9%.

Key Quotes

“Industrial production growth dropped significantly to 6.8% y-o-y in January-February after a rebound to 7.9% in December (Consensus: 7.7%; Nomura: 7.1%).”

“Fixed asset investment growth slowed sharply to 13.9% y-o-y (ytd) in February from 15.7% in December (Consensus: 15.0%; Nomura: 15.1%).”

“Retail sales growth moderated to 10.7% y-o-y in January-February from 11.9% in December (Consensus: 11.6%; Nomura: 11.8%).”

“The property market correction continues, with sales dropping sharply, down 16.3% y-o-y (ytd) in February, from a decline of 7.6% in December in volume terms.”

“We lower our Q1 GDP growth forecast to 6.9% y-o-y and add more monetary policy easing (two more interest rate cuts) to our previous policy call (three RRR cuts and one interest rate cut).”

“Given our expectation for further policy easing, we maintain our GDP growth forecast of 6.8% for the full year.”