China Growth Tacker – Is China’s Growth Momentum Fading?

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 has fallen on the week, while the long-term growth tracker has moved sideways (Chart 1). We like to focus on the short-term measure as that tends to drive investor expectations more.
• Within the components, oil prices showed the biggest decline after a sharp rise in recent weeks, dropping 15% (Chart 4). We also saw decreases in copper and Baltic Dry (Charts 3, 5).
• Iron ore prices and Chinese bond yields were up, although not by enough to offset other declines (Charts 2, 6).
• Long-term changes were more steady, except 10yr Chinese bonds, which moved 15% to -22.4.
• While recent growth in copper and oil turned negative this week, more sustained declines are needed to determine whether China is through the peak of its short-term growth momentum.

Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)