Signals from China are usually subtle and actions are often dramatic, we look at Xi’s landmark speech to start the Party Congress. The Canadian dollar was the top performer and the yen lagged. The Australian jobs report and a sensitive Chinese GDP reading are up next. The latest Premium video is posted below.
Xi spoke for nearly three-and-a-half hours to start the Congress in what is his longest-ever speech by far. That timeline gave him an opportunity to touch on just about everything, but one thing he didn’t mention is an oft-repeated pledge to double growth between 2010 and 2020.
Along with a further emphasis on corruption, stability and a year-2035 horizon for becoming a ‘modern’ nation, make us wary that any tough choices that need to be made will come soon. The Congress – where new top leaders are installed – takes place every five years and like with all politicians, it’s best to take the bad medicine early.
The Congress continues until Tuesday so we will be looking for more signs of deleveraging. The health of the economy will determine the extent of the crackdown. On that front, some key numbers are due at 0200 GMT with GDP, retail sales and industrial production. Growth is expected at 1.7% q/q and 6.8% y/y. We’re skeptical of Chinese numbers at the best of times but the data during the Congress is especially dubious. Still, it will be a talking point.
The other big number to watch is the 0030 GMT Australian jobs report. The consensus is for a +15.0K reading following a +54.2K surprise last month. Another strong report and a drop in the 5.6% unemployment rate could help to ease housing worries and jar the RBA out of neutral.
