Chinese ‘activity data’ for April 2022 was published today. This data includes retail sales (-11.7% y/y in April), industrial production (-2.9% y/y), urban unemployment rate (6.1%) and more (see bullets above). Obviously, the data was impacted by the severe restrictions throughout the whole month in China’s largest city and key economic powerhouse of Shanghai, and other eastern economically important cities. Ongoing lockdowns were a terrible problem for many economies in 2020 and into 2021. Its a shame China has not been able to address COVID-19 outbreaks as we have moved towards the middle of 2022.
To markets. Early in the session we had a continuation of the bid seen on Friday for US equity index futures. Oil, too, began the new week trading up. AUD, NZD, GBP showed gains against the USD. All of this optimism was not long-lasting though. Even before the dreadful Chinese data these markets had begun to turn lower. Sentiment was not assisted by the People’s Bank of China injecting 100bn yuan through a one-year Medium Term Lending Facility at an unchanged rate of 2.85%. There have been persistent expectations of rate cuts from the PBOC and these have been consistently dashed. Again, today. The unchanged rate on today’s MLF makes a rate cut at the upcoming Loan Prime Rate setting, coming on Friday 20 May) from the PBOC unlikely.
USD/JPY turned lower on the session, dropping sharply back under 129.00. Yen crosses have thus been hit. AUD/JPY a big loser:
Read More:ForexLive Asia FX news wrap: China April economic data collapses
2022-05-16 03:00:38