Asia ahead of a chance for growth? What will the week bring?

Last week, China published a GDP report, which shows that economic growth in the Middle Kingdom amounted to 4,5% on an annual basis - much better than the forecast 4% y/y. While government data has long raised many doubts, low-frequency data such as traffic in the subway or on roads indicate a decisive effect of the lifting of pandemic restrictions at the end of last year.

However, looking more closely at the Chinese economy, it is impossible not to notice the difference between the indexes of activity in the service sector and in industry. While both the Caixin index and the NBS index for services rebound strongly as a result of the end of the Zero Covid policy, the industrial indices are starting to fall. This may mean an increase in consumer demand, with no qualitative change for Chinese enterprises. Prices of building materials in China remain stable, which confirms the thesis that there is no significant recovery in investment demand. So can we count on a continuation of the rebound? China's Hang Seng Index? Recently, the local market has been performing much worse than the global stock market…

Is industry activity declining?

Manufacturing activity is also deteriorating in Europe – even with lower energy prices and diminishing supply chain issues, we are seeing the largest divergence between the manufacturing and services PMIs since 2008. Clear pressure from consumers, with the relative weakness of the industry on the Old Continent, may force EBC to further interest rate increases. So what can you expect from the quotes EURUSD or DAX?

In today's webinar you will learn:

• Successful opening of the Chinese economy?
• PMI will force the ECB what further rate hikes?
• American PMI indices with a different overtone than European ones

About the host

Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.

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