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Yuan Slides After China Jobless Rate Spikes, Industrial Production Growth Tumbles
03-13-2019, 10:31 PM,
#1
Yuan Slides After China Jobless Rate Spikes, Industrial Production Growth Tumbles
Yuan Slides After China Jobless Rate Spikes, Industrial Production Growth Tumbles

<p>After January's record surge, February saw <a href="https://www.zerohedge.com/news/2019-03-10/chinese-credit-growth-unexpectedly-crashes-february">China's credit growth unexpectedly collapse</a> prompting notable downgrades in expectations for tonight's macro data bonanza.</p>

<p>Chinese central bank reported that in February, <strong>aggregate financing increased by a paltry 703 billion yuan, roughly half the expected 1.3 trillion... </strong></p>

<p><a data-image-external-href="" data-image-href="/s3/files/inline-images/china%20TSF%20feb%202019%202.jpg?itok=GKHSspdy" data-link-option="0" href="https://www.zerohedge.com/s3/files/inline-images/china%20TSF%20feb%202019%202.jpg?itok=GKHSspdy"><picture><source media="all and (min-width: 1280px)" srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20TSF%20feb%202019%202.jpg?itok=wvbje91N 1x" type="image/jpeg"></source><source media="all and (min-width: 480px)" srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20TSF%20feb%202019%202.jpg?itok=wvbje91N 1x" type="image/jpeg"></source><source media="all and (min-width: 1024px)" srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20TSF%20feb%202019%202.jpg?itok=wvbje91N 1x, https://zh-prod-1cc738ca-7d3b-4a72-b792-...k=wvbje91N 2x" type="image/jpeg"></source><source media="all and (min-width: 768px)" srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20TSF%20feb%202019%202.jpg?itok=wvbje91N 1x" type="image/jpeg"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_mobile/public/inline-images/china%20TSF%20feb%202019%202.jpg?itok=GKHSspdy 1x" type="image/jpeg"></source><picture><!--[if IE 9]><video style="display: none;"><![endif]--><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20TSF%20feb%202019%202.jpg?itok=wvbje91N 1x" media="all and (min-width: 1280px)" type="image/jpeg"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20TSF%20feb%202019%202.jpg?itok=wvbje91N 1x" media="all and (min-width: 480px)" type="image/jpeg"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20TSF%20feb%202019%202.jpg?itok=wvbje91N 1x, https://zh-prod-1cc738ca-7d3b-4a72-b792-...k=wvbje91N 2x" media="all and (min-width: 1024px)" type="image/jpeg"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20TSF%20feb%202019%202.jpg?itok=wvbje91N 1x" media="all and (min-width: 768px)" type="image/jpeg"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_mobile/public/inline-images/china%20TSF%20feb%202019%202.jpg?itok=GKHSspdy 1x" type="image/jpeg"></source><!--[if IE 9]></video><![endif]--><img data-entity-type="file" data-entity-uuid="8fad869c-4986-4876-a875-9fe7c5f73cf7" data-image-external-href="" data-link-option="1" data-responsive-image-style="inline_images" height="241" typeof="foaf:Image" width="500" src="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/inline-images/china%20TSF%20feb%202019%202.jpg" alt="" /></picture></picture></a></p>

<p>... and the lowest print on record in the recently revised series. Additionally, growth in China's broad money supply, or M2, once again slumped and after a modest rebound in January, in February <strong>M2 Y/Y growth dropped back to 8.0%, the lowest print in series history.</strong></p>

<p><a data-image-external-href="" data-image-href="/s3/files/inline-images/china%20m2%20YoY.jpg?itok=OTFP9V9U" data-link-option="0" href="https://www.zerohedge.com/s3/files/inline-images/china%20m2%20YoY.jpg?itok=OTFP9V9U"><picture><source media="all and (min-width: 1280px)" srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20m2%20YoY.jpg?itok=vaOSBtot 1x" type="image/jpeg"></source><source media="all and (min-width: 480px)" srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20m2%20YoY.jpg?itok=vaOSBtot 1x" type="image/jpeg"></source><source media="all and (min-width: 1024px)" srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20m2%20YoY.jpg?itok=vaOSBtot 1x, https://zh-prod-1cc738ca-7d3b-4a72-b792-...k=vaOSBtot 2x" type="image/jpeg"></source><source media="all and (min-width: 768px)" srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20m2%20YoY.jpg?itok=vaOSBtot 1x" type="image/jpeg"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_mobile/public/inline-images/china%20m2%20YoY.jpg?itok=OTFP9V9U 1x" type="image/jpeg"></source><picture><!--[if IE 9]><video style="display: none;"><![endif]--><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20m2%20YoY.jpg?itok=vaOSBtot 1x" media="all and (min-width: 1280px)" type="image/jpeg"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20m2%20YoY.jpg?itok=vaOSBtot 1x" media="all and (min-width: 480px)" type="image/jpeg"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20m2%20YoY.jpg?itok=vaOSBtot 1x, https://zh-prod-1cc738ca-7d3b-4a72-b792-...k=vaOSBtot 2x" media="all and (min-width: 1024px)" type="image/jpeg"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/china%20m2%20YoY.jpg?itok=vaOSBtot 1x" media="all and (min-width: 768px)" type="image/jpeg"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_mobile/public/inline-images/china%20m2%20YoY.jpg?itok=OTFP9V9U 1x" type="image/jpeg"></source><!--[if IE 9]></video><![endif]--><img data-entity-type="file" data-entity-uuid="1c401e4f-f1ed-47ae-8457-300a491a5094" data-image-external-href="" data-link-option="1" data-responsive-image-style="inline_images" height="243" typeof="foaf:Image" width="500" src="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/inline-images/china%20m2%20YoY.jpg" alt="" /></picture></picture></a></p>

<p>The February collapse in credit creation following January's extravagant print likely means that just like most other Chinese data in the pre-New Year period, this too was distorted by the Lunar New Year, and as a result the January surge, far from indicative of a major new reflationary boost may simply suggest that China will maintain a prudent approach to overall economic leverage, which however will be bad news for the stock market which in the second half of February went all in on <strong>bets that China has doubled-down on reflating both its, and the global economy</strong>.</p>

<p>And China's credit impulse has weakened back after January's rebound:</p>

<p><a data-image-external-href="" data-image-href="/s3/files/inline-images/2019-03-13_18-30-15.png?itok=Y8QsYZQe" data-link-option="0" href="https://www.zerohedge.com/s3/files/inline-images/2019-03-13_18-30-15.png?itok=Y8QsYZQe"><picture><!--[if IE 9]><video style="display: none;"><![endif]--><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_18-30-15.png?itok=cn9eaO3A 1x" media="all and (min-width: 1280px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_18-30-15.png?itok=cn9eaO3A 1x" media="all and (min-width: 480px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_18-30-15.png?itok=cn9eaO3A 1x, https://zh-prod-1cc738ca-7d3b-4a72-b792-...k=cn9eaO3A 2x" media="all and (min-width: 1024px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_18-30-15.png?itok=cn9eaO3A 1x" media="all and (min-width: 768px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_mobile/public/inline-images/2019-03-13_18-30-15.png?itok=Y8QsYZQe 1x" type="image/png"></source><!--[if IE 9]></video><![endif]--><img data-entity-type="file" data-entity-uuid="caef47f6-9555-491d-860a-66ef00dcf32d" data-responsive-image-style="inline_images" height="264" width="500" src="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/inline-images/2019-03-13_18-30-15.png" alt="" typeof="foaf:Image" /></picture></a></p>

<p>Heading into the data, Chinese macro data has been extremely weak despite endless streams of stimulus:</p>

<p><a data-image-external-href="" data-image-href="/s3/files/inline-images/2019-03-13_18-27-12.png?itok=8KChVSSd" data-link-option="0" href="https://www.zerohedge.com/s3/files/inline-images/2019-03-13_18-27-12.png?itok=8KChVSSd"><picture><!--[if IE 9]><video style="display: none;"><![endif]--><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_18-27-12.png?itok=OTGA6hoS 1x" media="all and (min-width: 1280px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_18-27-12.png?itok=OTGA6hoS 1x" media="all and (min-width: 480px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_18-27-12.png?itok=OTGA6hoS 1x, https://zh-prod-1cc738ca-7d3b-4a72-b792-...k=OTGA6hoS 2x" media="all and (min-width: 1024px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_18-27-12.png?itok=OTGA6hoS 1x" media="all and (min-width: 768px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_mobile/public/inline-images/2019-03-13_18-27-12.png?itok=8KChVSSd 1x" type="image/png"></source><!--[if IE 9]></video><![endif]--><img data-entity-type="file" data-entity-uuid="097a13fb-ca5e-4c6a-8254-fb6fc516bdd7" data-responsive-image-style="inline_images" height="264" width="500" src="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/inline-images/2019-03-13_18-27-12.png" alt="" typeof="foaf:Image" /></picture></a></p>

<p>But, as Bloomberg reports, the latest PMI figures out of China have suggested some stabilization in an economic slowdown that hit last year. Though the blow from the trade war to exports and production probably hasn't fully hit as yet.</p>

<p>So what did February's data look like:</p>

<ul><li>
<p><strong>China Industrial Production YoY MISS</strong> +5.3% vs +5.6% exp and +6.2% prior</p>
</li>
<li>
<p><strong>China Retail Sales YoY MEET</strong> +8.2% vs +8.2% exp and +9.0% prior</p>
</li>
<li>
<p><strong>China Fixed Asset Investment YoY MEET</strong> +6.1% vs +6.1% exp and +5.9% prior</p>
</li>
<li>
<p><strong>China Property Investment YoY BEAT</strong> +11.6% vs +9.5% prior</p>
</li>
<li>
<p><strong>China Surveyed Jobless Rate WEAKER </strong>5.3% vs 4.9% prior</p>
</li>
</ul><p>This is the <strong>weakest Industrial Production growth since March 2009 </strong>and Retail Sales growth is hovering near its weakest since May 2003. But perhaps the most worrisome for Chinese officials is the <strong>surge in the surveyed jobless rate to 5.3%, the highest since Feb 2017.</strong></p>

<p>Graphically:</p>

<p><a data-image-external-href="" data-image-href="/s3/files/inline-images/2019-03-13_19-03-12.png?itok=d4GYkgQ_" data-link-option="0" href="https://www.zerohedge.com/s3/files/inline-images/2019-03-13_19-03-12.png?itok=d4GYkgQ_"><picture><!--[if IE 9]><video style="display: none;"><![endif]--><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_19-03-12.png?itok=PucbQA9T 1x" media="all and (min-width: 1280px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_19-03-12.png?itok=PucbQA9T 1x" media="all and (min-width: 480px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_19-03-12.png?itok=PucbQA9T 1x, https://zh-prod-1cc738ca-7d3b-4a72-b792-...k=PucbQA9T 2x" media="all and (min-width: 1024px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_19-03-12.png?itok=PucbQA9T 1x" media="all and (min-width: 768px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_mobile/public/inline-images/2019-03-13_19-03-12.png?itok=d4GYkgQ_ 1x" type="image/png"></source><!--[if IE 9]></video><![endif]--><img data-entity-type="file" data-entity-uuid="27eaed4b-3ee7-4925-8607-67848d19073a" data-responsive-image-style="inline_images" height="342" width="500" src="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/inline-images/2019-03-13_19-03-12.png" alt="" typeof="foaf:Image" /></picture></a></p>

<p><em>Of course, all of this comes with a warning that figures for this time of year can be volatile due to the lunar new year holiday in China, when factories and offices are significantly affected by a week-long break. The timing of the holiday shifts. Early February 2019, mid-February 2018 and late January to early February 2017, for example. So it really distorts the Jan/Feb data. </em></p>

<p>Offshore yuan was fading into the data (and ChiNext was extending its losses from the last two days) and extended its losses after the data disappointment...</p>

<p><a data-image-external-href="" data-image-href="/s3/files/inline-images/2019-03-13_19-07-17.png?itok=-59dLCLW" data-link-option="0" href="https://www.zerohedge.com/s3/files/inline-images/2019-03-13_19-07-17.png?itok=-59dLCLW"><picture><!--[if IE 9]><video style="display: none;"><![endif]--><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_19-07-17.png?itok=VzUcQWgv 1x" media="all and (min-width: 1280px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_19-07-17.png?itok=VzUcQWgv 1x" media="all and (min-width: 480px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_19-07-17.png?itok=VzUcQWgv 1x, https://zh-prod-1cc738ca-7d3b-4a72-b792-...k=VzUcQWgv 2x" media="all and (min-width: 1024px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_desktop/public/inline-images/2019-03-13_19-07-17.png?itok=VzUcQWgv 1x" media="all and (min-width: 768px)" type="image/png"></source><source srcset="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/inline_image_mobile/public/inline-images/2019-03-13_19-07-17.png?itok=-59dLCLW 1x" type="image/png"></source><!--[if IE 9]></video><![endif]--><img data-entity-type="file" data-entity-uuid="5b245e9f-350d-43ee-a230-048514e7cd5c" data-responsive-image-style="inline_images" height="262" width="500" src="https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/inline-images/2019-03-13_19-07-17.png" alt="" typeof="foaf:Image" /></picture></a></p>

<p>The soft reading on industrial output is probably the key takeaway from these numbers, opening the big question of whether this is reflective of a deeper downturn than anticipated as the trade war effects start to bite in earnest (or if it can be blamed on the Lunar New Year effect)?</p><img src="http://feeds.feedburner.com/~r/zerohedge/feed/~4/aiBR416N7Jg" height="1" width="1" alt=""/>


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