China Weekly Dynamics

This report previews China's Q2 macroeconomic data, forecasting a moderation in real GDP growth to 4.6% alongside a turn to positive nominal growth. It also notes policy trends favoring continued CNY strength and potential supply-side pressures in the government bond market for Q3.

Key Takeaways

• 1.China's real GDP growth is forecasted to have moderated to 4.6% YoY in Q2, down from 5.0% in Q1.
• 2.Authorities are likely continuing to tolerate CNY strength and narrowing the spot-fixing gap.
• 3.Supply pressure on government bond rates is expected in Q3 due to seasonal duration supply and potential pick-up in PFBs.

Table of Contents

• Macro: Growth divergence and policy implication
• Lowering USD/CNY fixing, supply pressure in rates
• Asset overview and flows
• Macro: Trade dynamics
• Macro: Demand and supply snapshot
• Macro: Prices and inflation
• Macro: monetary and fiscal condition
• FX market: Market dynamics
• FX market: Macro Fundamentals
• FX market: Forwards & options
• Fixed income market: Performance
• Fixed income market: Money market and liquidity
• Fixed income market: Primary market
• Fixed income market: Interbank bond holding
• Calendar

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