China: GDP and economic data were better-than-expected - Rabobank

Elwin de Groot, Senior Eurozone Strategist at Rabobank, notes that early this morning, China released its monthly set of key economic data as well as its GDP stats for the second quarter.

Key Quotes

“At face value, the monthly data for June were better-than-expected. Both industrial output growth and retail sales accelerated slightly in June. These numbers were accompanied by a significant rebound in aggregate financing, from CNY 660bn in May to more than CNY 1.6trn in June. This suggests that a fresh credit impulse underpinned these positive surprises. This is unlikely to be sustainable, in our view. In line with the monthly data, quarterly GDP growth rebounded from 1.2% in Q1 (yes, upwardly revised from 1.1%), to 1.8% in Q2.

Altogether this boiled down to a 6.7% y-o-y growth rate, unchanged from Q1 and bang in line with the official growth target. Despite all the caveats, for now these numbers may soothe concerns in the market that the China’s soft landing is turning into a hard one.”