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What to expect from today's China GDP? - RBS

FXStreet (Bali) - Brian Daingerfield, FX Trading Strategist at RBS, writes on the upcoming Chinese GDP release, noting that soft growth numbers may boost expectations around new stimulus.

Key Quotes

"The GDP growth numbers come just a week before the start of China’s Communist Party Plenum, and soft growth numbers may boost expectations around new stimulus from the Chinese authorities."

"I agree with our credit independent research colleagues, who write their The Silver Bullet that they do not anticipate a large-scale stimulus to be announced, as the second round impacts of the massive 2008 stimulus package helped create the problems with debt overhang that authorities are struggling with today."

"As a result, we prefer fading any “bad news is good news for risk / bad growth is positive because more a massive stimulus is coming” reaction in China. With the fiscal stimulus more limited, the authorities may eventually be more apt to let the currency depreciate as a part of a broader easing of conditions."

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