CIBC: Chinese Economic Data Supportive For Commodities

Posted by Allen Sykora - Kitco

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Chinese economic data Friday was mixed relative to expectations but on balance was supportive for commodities, says CIBC. Industrial production accelerated 9.7% year-on-year in July. “That’s appreciably stronger than the 8.9% pace expected by the market and previous month’s tempo, although still well below the trend of recent years,” CIBC says. “Retail sales in contrast came in slightly below expectations, advancing by 13.2% (consensus 13.5%), showing little change from the preceding month’s pace.” Fixed-asset investment was up 20.1%, essentially matching estimates. Consumer inflation was steady at 2.7%, a tick below expectations. Producer price inflation fell by 2.3% year-on-year. The data come on the heels of a report Thursday showing exports rose 5.1% year-on-year in July, while imports jumped 10.9%. “It’s risky to read too much into one month of data and there are as yet few signs of a solid turnaround,” CIBC says. “Still, today’s numbers as with yesterday’s trade release lends support to the view that the economy’s performance may be bottoming after a six-month long downshift. Today’s numbers are lending support to commodities and stocks in Asia.” Most base and precious metals are steady to slightly higher and crude oil is also higher as the tra