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China Industrial Production worth watching - Westpac

FXStreet (Barcelona) - Sean Callow, analyst at Westpac Banking Corporation ABN explains further day ahead releases; China GDP and Industrial Productions.

Key Quotes:

“China’s flurry of data is due at 1pm Syd/10am Sing/HK: Q3 GDP and Sep readings on industrial production, fixed asset investment and retail sales. Westpac agrees with the consensus forecast of 7.2% y/y on GDP, after 7.5% in Q2, with mild downside risks. Weak domestic demand should be largely offset by net export boost, with a high base effect (strong Q3 a year ago) the driver for the lower year on year outcome. Nominal GDP, which is a more robust estimate than the real figure, is expected to slow substantially, from 9.0% to 7.7%”.

“This is probably the low point for China GDP, with an early look at Q4 coming in at 7.5% The actual reading has been either in line with consensus or +/-0.1ppt for the past 5 quarters. It would probably take a miss of 0.2ppt or more to have a substantial impact on AUD, NZD and Asian FX”.

“We see greater risk of a 7.1% outcome than a 7.3% outcome”.

IP is the monthly release most worth watching, after printing a long way below consensus in Aug, at just 6.9% y/y, its weakest growth pace since Dec 2008. Partial recovery to 7.5% y/y is expected”.

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