The quarterly data, better than expected, allows you to delay a rate cut
China’s GDP surprised to the upside in the quarter, with year-on-year growth of 4.8%, well above analyst expectations. March activity slowed sharply, due to lockdowns, and the disruption in services showed signs of spreading to industry. Total social financing reached 680 billion euros in March, when economists expected 540 billion.
It is the calm before the storm. Gavekal researchers estimate that cities that contribute more than half of GDP were subject to some type of restriction at the beginning of the month. It could end in recession, although the central bank announced another cut in banks’ required reserves on Friday, but did not move rates. Investors who were betting on drastic easing are disappointed. The CSI300 index fell after the GDP data, probably because it will help the supervisor to justify its conservatism for longer.
