Weak China Q2 GDP Expected on Monday

Weak trade data for China has left investors expecting more doom and gloom with next week’s release of second-quarter numbers, and according to Lombard Street Research, the world’s second-largest economy could shock markets with a quarter-on-quarter contraction in gross domestic product (GDP).

“Global markets could be due for a shock,” Charles Dumas, an economist at Lombard Street Research said in a research note on Wednesday.

“Assuming the trade data are taken at face value, rather than some obscure adjustment being needed for the dodgy data vis-a-vis Hong Kong, there is an even chance that on our estimation procedure next week’s real GDP will be down rather than up from [first quarter],” he said.

Monday’s GDP data will be keenly watched by investors aware that the days of double digit growth are firmly behind China. A Reuters poll predicts a 1.8 percent quarter-on-quarter rise and a 7.5 percent rise on a yearly basis. That would be slowest pace of growth (year-on-year) since the third quarter of last year. But Dumas believes these figures could be generously overstated.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu