This week has a lot to tell about one of the biggest and major economies globally.
China's Industrial Production, which refers to the level of output of the country’s manufacturing, mining, and utilities sectors, is expected to be announced on the 15th of September. Any change can have a significant impact on the global markets as it acts as a barometer for the overall health and growth of the country’s industrial sector and economic performance as well as global supply chains, since China has extensive international trade agreements.
Despite the previous figure being up 3.7% YoY in July, it was not a positive sign since it was a slowdown from July’s 4.4%. It is, however, expected to recover slightly by increasing to 3.9% in August. By the end of this quarter, it is expected at 3.3%.
Positive data shows a strong economy and rising demand for goods and services, which may strengthen investor confidence in Chinese businesses. This is down to rising stock prices of listed Chinese companies. Conversely, if it shows signs of weakness, it can trigger bearish concerns about the economy.
Furthermore, the value of the Chinese yuan (CNY) may be influenced by data on China's industrial production. Increased foreign investment in China is frequently a result of high industrial output, which can support the CNY. On the other hand, low industrial production data may discourage foreign investment, which would cause the CNY to weaken.
China’s retail sales figure is another important economic indicator that is expected to be reported on the 15th of September. It tracks changes in the total amount of retail sales that have been adjusted for inflation. It is the most important gauge of consumer spending, which dominates all other forms of economic activity. A higher reading would entail the recovery of households thus higher economic activities and vice versa.
Last April saw the strongest figure, and it has been weakening ever since. Chinese Retail sales rose by 2.5% YoY in July, representing the slowest pace and declining from the previous month's 3.1% rise. The reading also fell short of the market’s expectations of 4.5%. But it is expected that the retail sales figure will gain back its momentum slightly to rise by 3% YoY in August.
Therefore, as mentioned earlier, these economic figures are important for investors to watch to navigate the market successfully.
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