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Economic growth in China remains stable in the face of strong retail sales
China's economic growth is still firm enough in the first quarter of 2018 amid strong retail sales, supporting global growth and giving the authorities more opportunities to eliminate excessive borrowing.
According to the National Bureau of Statistics of China, the gross domestic product in this Asian country grew by 6.8% in the first quarter on an annual basis, which coincided with the surge in the fourth quarter of the previous year and the estimates of economists.
Retail sales in March grew by 10.1% compared to the previous year, when growth was 9.7%. Economists had expected an increase of 9.7%
Additionally, it became known that in 2017 industrial production in annual terms surged weaker than anticipated - by 6% after the growth of 7.2% earlier and versus the growth forecast of 6.4%.
The volume of investments in fixed assets also ascended weaker than anticipated - by just 7.5% in March having soared 7.9% in February. Economists had expected an increase of 7.7%.
At the end of March, the new unemployment rate in major cities of China accounted for 5.1%.
Steady growth in China's economy involves supporting the mission of President Xi Jinping to ensure financial stability, which is one of the Chinese government’s key goals, as well as reducing poverty and limiting environmental pollution. A reliable expansion rate is a favorable wind for the global economy, which has maintained its reliable performance in 2018, providing the necessary support in the form of strong demand for China's exports.
Last week, Governor of the People's Bank of China Yi Gang told that that economic indicators offered more positive results than anticipated in the first quarter amid further improvement in global forecasts.
However, risks can intensify in the coming months, if the fight of the Chinese leader with financial risks and environmental pollution steps up or if tension in trade with the United States continues.
The US dollar is heading for the best week in three. The market sentiment is mixed as optimism about the global economic recovery was outshined by increasing tensions between the West and China.
Rising yields, potential US tax hikes, and inflation fears worry investors. As a result, the market sentiment is risk-off. Stocks are falling, while the USD and the JPY are edging higher.
What events to follow and how to trade during the week of July 2-6?
EUR/USD retraced to 1.1870 after breaking out this level. It should be just a natural sell-off ahead of the further rally up.
The Fed held a much-awaited meeting yesterday. The bank hasn’t made any policy changes. As a result, the USD weakened and EUR/USD rocketed. Jump in to know all the latest news!