Via Nomura’s Bilal Hafeez,
Overnight, we received the latest data for Chinese growth, and on balance they were weaker than expected. Our economists continue to look for the weakness to persist. The challenge for the market is whether to focus on this likely near-term weakness or focus on the likely stimulus-led bounce in the second half of this year.
Government wants pick-up
The key government-driven measures of infrastructure investment and credit appear to have reached a trough after a year of weakness, but have yet to establish a firm upward trend (Figure 1). Meanwhile, Chinese stocks appear to be focusing on the prospective stimulus rather than the current weak data (Figure 2).