China GDP Numbers Beat Forecasts to Support Riskier Assets

It was a busy morning on the Asian economic calendar. While the RBA meeting minutes from the April 4 meeting drew interest, economic indicators from China had more influence on the global financial markets.

Q1 GDP, fixed asset investment, industrial production, and retail sales figures from China were in focus. The numbers did not disappoint, with the Chinese economy rebounding strongly at the turn of the year.

In Q1, the Chinese economy expanded by 2.2% versus 0.6% growth in Q4 2022. The numbers were in line with forecasts. However, year-over-year, the economy expanded by 4.5% versus a forecasted 4.0%. In Q4 2022, the economy grew by 2.9% year-over-year.

Retail sales and industrial production figures also impressed, signaling a positive end to the first quarter.

Retail sales increased by 10.6% in March year-over-year versus +3.5% in February. Economists forecast an increase of 7.4%. Industrial production advanced by 3.9% versus 2.4% in February. Economists forecast a rise of 4.0%.

However, fixed asset investment rose at a less marked rate. In March, fixed asset investment increased by 5.1% year-over-year versus 5.5% in February. Economists forecast a 5.7% increase.

The latest numbers from China supported commodities, with Brent Crude Oil rising by 0.34% to $85.05 this morning.

AUD/USD Reaction to China GDP Numbers

Ahead of the economic data from China, the AUD/USD fell to a pre-stat low of $0.66936 before rising to a high of $0.67032.

However, the AUD/USD rallied from a post-stat low of $0.67009 to a high of $0.67207 in response to the stats from China.

This morning, the Aussie was up 0.16% to $0.67109.

Next Up

Following the better-than-expected numbers from China, the market focus will return to the US economic calendar, corporate earnings, and the Fed.

Looking toward the US session, housing starts and building permit figures will draw interest. However, we don’t expect the numbers to influence the Fed monetary policy outlook, leaving Fed chatter and corporate earnings to impact market risk sentiment.

Big names on the US corporate earnings calendar include Johnson & Johnson (JNJ), Netflix (NFLX), Bank of America (BAC), and Goldman Sachs (GS).