In China April industrial production growth may have improved over that in March (the lowest growth since the global financial crisis, partly due to the late Lunar New Year in 2015, which delayed the resumption of production). However, weak new orders (the HSBC flash PMI new order index fell further under 50) may have kept IP growth below the Q1 level of 6.4% y/y. Meanwhile, fixed asset investment likely slowed further. The property-market correction continues to dampen developers’ appetite for new projects. Falling land-sale revenues are expected to curtail local governments’ ability to invest in infrastructure, which was a rare bright spot up until March.Overall FAI appears to be constrained by funds secured for investment. “We estimate that total real gross capital formation rose only 2.8% y/y in Q1”, Says Standard Chartered.China’s retail sales may have ticked up slightly, reflecting solid personal income growth and slightly higher inflation, while money-supply growth may also be stronger reflecting the 150bps cut in required reserves this year. The economy is seen staying soft near-term, as the property market correction works through.
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