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"Good News" - China GDP Beats Expectation Leaving Fed 'Relieved', Stocks Disappointed

AsiaPac stocks were generally lower heading into the all-important Chinese macro data (S&P -6pts, Japan -0.7%, China -0.2%) as JPY erased Friday's ramp and crude dropped back below $47. The PBOC left the Onshore Yuan fix practically unchanged (following Friday's significant devaluation). Then the data hit... China GDP beat expectations (printing 6.9% YoY vs 6.8% exp) but is still the lowest growth since Q1 2009. Industrial Production missed (printing 5.7% YoY vs 6.0% exp). Retail Sales beat (10.9% YoY vs 10.8% exp). The initial reaction was kneejerk buying in USDJPY and stocks but that is fading as "good news" will relieve The Fed's angst over growth...

 

Before... USDJPY and S&P Futs lower (along with most of AsiaPac stocks, gold, and crude)

 

Then the data hit...

 

And then we had Chinese Retail Sales, which Beat expectations of a 10.8% YoY gain with an "easily explainable" +10.9% YoY

And Chinese Industrial Production missed, printing +5.7% YoY(against expectations of a 6.0% YoY gain)

And then the big one...

38 "qualified" economists saw China's GDP between 6.9% and 6.4% (with a 6.8% median estimate)... notably China's monthly (higher frequency data based) estimate of GDP was 6.64%.. BUT CHINA GDP BEAT EXPECTATIONS printing +6.9%!! It's a Fall Miracle!!

Bear in mind, as Bloomberg reports that China has tweaked how it reports gross domestic product to meet the International Monetary Fund’s data reporting standards.

The National Bureau of Statistics will release output for each quarter on Monday, plus a cumulative reading. It previously released quarterly economic growth but didn’t specify GDP for each three-month period.

 

The new figure makes it easier to calculate the change in output (unadjusted for inflation) in the last quarter from a year earlier, as the aggregate ones usually smoothed out volatility. This may signal a sharper third-quarter slowdown than the stable headline growth reading.

In other words, what "changes" that historically were implemented that juiced historical GDP, are now evolving out of the data and detracting from what must be 'stellar' performance given the actual data beat expectations... Thus relieving an anxious Fed and opening the door to a December rate hike no matter what...

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The reaction... disappointment...

 

*  *  *

There was one more significant data item out of China tonight - Fixed Assets Investment - which rose just 10.3% Cumulative YoY... the lowest growth since Dec 2000...

 

Because who needs CapEx after all? Oh wait... 50% of China GDP is CapEx (never mind though, we are sure all these numbers are 'accurate').

*  *  *

Finally there is this utterly reflexive crap...

  • *CHINA'S SLOWDOWN PARTLY DUE TO FED RATE HIKE EXPECTATION: SHENG

And this...

  • *SURVEY BASED UNEMPLOYMENT STAYS AROUND 5.2%: SHENG (seems oddly familiar!!??)
  • *TPP IMPACT ON CHINA ECONOMY WON'T BE BIG, SHENG SAYS (don't tell Obama)

Charts: Bloomberg