China Day
China GDP grew 8.9% in third quarter vs. 9% consensus. All risky assets headed lower on the news, U.S. dollar higher. Puzzled, makes no sense. Bloomberg explanation: China’s Economy Grows 8.9%, Fastest Pace in a Year.
The media focus is on stimulus, monetary expansion. Chinese officials have already addressed those issues, at least verbal. In my view the depressed exports; over capacity; real estate bubble; credit boom are big issues and I am little bit skeptic on can China ride out of this recession smoothly. Correction today in Asia on concern of stimulus withdrawal.
Two interesting stories on China by Reuters this week. The first is on overcapacity: China tries, again, to curb industrial overcapacity; the second one on bank credit policy change: China tells banks to brace for policy shift.
Returning to the U.S. Initial jobless claims came at 531k vs. 519 consensus. The previous week figure was revised up from 514k to 520k. It’s not coming down. Bloomberg story: U.S. Initial Jobless Claims Rose More Than Forecast.
China, China GDP, China Money Supply, Initial Jobless Claims