We recently published a note on how to track Chinese growth in real-time using financial and commodity market prices. In these weekly reports, we will update the indicator to help us track growth. The latest data shows:
Our overall short-term growth tracker is down for a second week, but remains within a high historical range (Chart 1). We like to focus on this measure as it tends to drive investor expectations.
This week we’ve added Chinese freight rail traffic and import data to the tracker (Chart 2). Three-month changes are moving in a positive direction, underpinning the strong short-run growth performance we have seen in recent months.
This article is only available to Macro Hive subscribers. Sign-up to receive world-class macro analysis with a daily curated newsletter, podcast, original content from award-winning researchers, cross market strategy, equity insights, trade ideas, crypto flow frameworks, academic paper summaries, explanation and analysis of market-moving events, community investor chat room, and more.
We recently published a note on how to track Chinese growth in real-time using financial and commodity market prices. In these weekly reports, we will update the indicator to help us track growth. The latest data shows:
- Our overall short-term growth tracker is down for a second week, but remains within a high historical range (Chart 1). We like to focus on this measure as it tends to drive investor expectations.
- This week we’ve added Chinese freight rail traffic and import data to the tracker (Chart 2). Three-month changes are moving in a positive direction, underpinning the strong short-run growth performance we have seen in recent months.
- Within the components of our growth tracker, short-term price changes are down. The three-month growth measures do, however, all remain in positive territory. The most sizeable change was the 48 ppt decline in the 3m growth of Baltic Dry (Chart 6).
- Iron ore (Chart 3) and copper (Chart 4) have moved sideways on last week. Copper prices are currently at June 2018 levels, and have been rising steadily since late-March. Iron ore prices are also high relative to historical values.
- Short-run changes in oil and bond yields are also down, but long-run growth is up on last week (Charts 5, 7). Finally, we graph 3m changes in USD/CNH and A50 (Chart 8). These have moved in the direction of a stronger CNH and a better performing stock market.
- Overall, there are signs that short-term Chinese growth momentum is weakening, but strong fundamentals suggest this may just be a levelling off. Long-term growth (12m changes) is holding steady after inching into positive territory last week.
