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China GDP grew 3.2% yoy in Q2, June retail sales weak

China’s GDP grew 3.2% yoy in Q2, above expectation of 2.5% yoy. Barring the steep -6.8% contraction in Q1, Q2’s figure is still the worst on record. For H1 as a whole, the economy contracted -1.6% yoy from a year earlier. On quarter-on-quarter basis, GDP rose 11.5% qoq in Q2, higher than expectation of -9.6% qoq, and sufficient to reverse the -9..8% qoq decline in Q1.

Also from China, retail sales dropped -1.8% yoy in June, below expectation of 0.3% yoy rise. Industrial production rose 4.8% yoy in June, slightly above expectation of 4.7% yoy. Fixed asset investment dropped -3.1% ytd yoy in June, slightly above expectation of -3.2% ytd yoy.

USD/CNH’s fall from 7.1961 is in progress. Such decline is seen as the third leg of the medium term sideway pattern from 71.953. While deeper decline could be seen, strong support should be provided by 6.8452, which is close to 38.2% retracement of 6.2354 to 7.1935 at 6.8286, to contain downside to bring rebound. Break of 7.0970 resistance will suggests that the decline has completed.

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