Spreadex Market Update
China’s economic slowdown continues with shoddy GDP and industrial production figures
The two headline figures from this Monday’s latest dreaded package of Chinese data were the country’s third quarter GDP number and its continually troublesome industrial production output. The former fell to a 6 year low of 6.9%; crucially, however, that was marginally above the 6.8% expected, allowing for the Asian markets to hover near their recent 2 month highs without too much of a drop-off. It must be said, however, that already analysts are questioning the veracity of that number, with some stating that the real figure could be as low as 3%. Things were slightly more worrying with the latter figure; dropping to 5.7% from the forecast 6% (and the 6.1% seen last month), China’s industrial production just narrowly kept its head above the 5.6% low it saw in April.
So what did this mean for the European indices? Well, they appear to be focusing on the (slightly) more positive GDP figure than the latest slump in China’s manufacturing output, even if that positivity has merely led to a barely perceptible increase for the FTSE and a marginally better performance from the DAX.
Of course whatever nascent gains the FTSE is posting are under threat from its commodity sector, which seems a bit spooked after this morning’s Chinese data dump, with the majority of the UK index’s key oil and mining stocks slipping into the red soon after the bell. If this situation worsens the FTSE might find it very hard to hold onto any growth as the day continues.
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