Released from China, industrial production grew 4.4% yoy in May, accelerated from April’s 3.9% yoy, but missed expectation of 5.0% yoy. Retail sales’s contraction slowed to -2.8% yoy, up from April’s -5.7% yoy, and missed expectation of -2.0% yoy. Fixed asset investment dropped -6.3% ytd yoy, missed expectation of -5.9% ytd yoy too.
Outlook of China’s economy is clouded by the resurgence of coronavirus risk in its capital city. Beijing reported a cluster of new coronavirus cases linked to its biggest wholesale food markets overnight weekend, which is now shutdown. Authorities in Beijing locked down 11 residential communities near the Xinfadi market. Additionally, the China Southern Airlines was required to suspend flights between Dhaka, Bangladesh, and the southern city of Guangzhou for four weeks.
USD/CNH recovered after dipping to 7.0396 last week, ahead of 7.0364 support. Further decline is still expected as long as 7.1333 resistance holds. we’re seeing fall form 7.1961 as the third leg of the consolidation pattern from 7.1953. Sustained break of 7.0364 support would pave the way to retest 6.8452 next.
