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Huge data dump due from China on Friday – Q4 GDP and December activity

  
Analysis, Economy

Due at 0200GMT on 17 January 2020

China Q4 GDP

  • expected is +6.0% y/
  • prior was +6.0%  y/y

And for the whole of 2019:

  • expected +6.2% y/
  • prior was +6.2%  y/y

Quarterly GDP from China rarely strays far from expectations.

Monthly activity data, for December 2019, not too much change expected from the previous month:

  • Industrial Production y/y expected 5.9%, prior was 6.2%
  • industrial production YTD y/y expected is 5.6%, prior was 5.6%
  • Fixed Assets (excluding rural) YTD y/y, expected 5.2%, prior was 5.2%
  • Retail Sales y/y, expected 7.9%, prior was 8.0%
  • Retail Sales YTD y/y, expected 8.0%, prior was 8.0%

Reuters Tankan – Japan manufacturers sentiment index -6 (unchanged from December)

  
Analysis, Economy
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The monthly Reuters Tankan is more timely than the quarterly report of the same name from the BOJ.

  • January manufacturers’ sentiment index comes in at -6 (unchanged from Dec)
  • Service-sector index +14 in January vs. flat vs Dec
  •  Manufacturers’ mood seen up ahead, service sector down
Pessimism amongst Japanese manufacturers persisted in January, usual suspects cited:
  • China-U.S. trade tension
  • sluggish global demand
Looking ahead though,  some believed conditions will improve in the next few months
  • seen to 0 in April
Service-sector outlook sees 13 in April (slight fall)

German 2019 budget surplus reportedly in low two-digit billions of euros

  
Analysis, Economy
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Sueddeutsche Zeitung newspaper reports

Germany

The paper says that Germany generated a federal budget surplus in the low two-digit billions of euros with higher-than-expected tax revenues offset by lower-than-expected interest payment, without identifying the source of its information.

For some context, that should see the figure come just below the 2018 figure of €11.2 billion. The actual figure will be published later today.
This is a bit of a setback for those hoping for Germany to loosen the purse strings a little as such a low surplus will give more reason for lawmakers to not do so. That said, it’s not like those hopes were that high to begin with anyway.

Bundesbank official says euro zone GDP growth expected at 1.1% in 2020

  
Analysis, Economy

An official of the German central bank speaking in Hong Kong

  • pace of economic expansion in euro area expected to stabilise in 2020

Reuters with the headlines. Nothing further at this stage.

EZ growth has been lacklustre, 1.1% is not much better. It was 1.2% last year!
Comments from BUBA executive board member Burkhard Balz.(responsible for payments & settlements systems).

Forecasts for China GDP due this week (spoiler, full year 2019 at 6.1%)

  
Analysis, Economy

Bank of Communications economist (via Global Times):

2019 6.1%
Q4 6 % (compares with the same in Q3(
Slowdown in 2019 due to (the usual suspects follow …)
  • uncertainties in the world market
  • domestic factors, such as “the declining growth of manufacturing, labor-intensive and high-energy consumption industries as well as the country’s economic structural adjustment.”
China Q4 GDP is due on the 17th

World Bank cuts global growth forecasts for 2019 and 2020

  
Analysis, Economy
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They see some upside risks as trade risks cool

  • Cuts 2019 to 2.4% from 2.6% (lowest since crisis)
  • Cuts 2020 to 2.5% from 2.7%
  • Cuts 2020 emerging markets forecast to 4.1% from 4.6%
  • Forecasts 2020 trade growth at 1.9% vs 1.4% in 2019
  • Says growth in less developed regions far below levels needed to meet poverty-reduction goals

In a deeper breakdown, they boosted the 2020 US growth forecast while cutting China and Europe. On the whole, this isn’t great news for the global economy but it’s nothing surprising.

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