Due from China on Monday during the Asian timezone (19 October 2015 at 0200GMT) is Q3 GDP from China
In brief:
- Consensus expectation is at 6.8% y/y, the previous quarter was at 7.0%.
- The government target is 'around 7%', which is generally perceived to be allowing it to fall to around 6.5% as still qualifying as 'around'. Premier Li Keqiang said "As long as employment remains adequate, the people's income grows, and the environment continuously improves, GDP a little higher or lower than 7% is acceptable"
- While 6.5% would seem to be acceptable by officials, anything under 6.7% will see intensified calls for more stimulus measures.
Greg posted a preview here, with more to watch for, especially for the AUD ... the world's favourite proxy trading vehicle for China.
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What else to look for in the GDP
Apart form the headline, attention will turn to the GDP deflator. It often suspected that Chinese economic data is 'massaged' by officials (for the GDP, it would be those at the stats department, the National Bureau of Statistics, the NBS). In the case of the deflator, understating this data point will make 'real' economic growth appear stronger than it really is.
Of course, last week we got the CPI from China (for September), which came in low (at +1.6%, against expectations of +1.8% & prior of 2.0%). A low deflator might be on the cards.
There will be downward pressure on the GDP for Q3 due to the falls in the Chinese stockmarkets. Financial services growth had given a good boost to GDP in H1 of 2015 (Financial services up 17.4% in the first six months from a year earlier), but the falling stockmarket will have out a lid on this growth source. Of course, we may see some unespected growth in other sectors to even this out somewhat.
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Along with Q3 GDP there are other data points around the same time (scheduled for 0200GMT ... note that time of release of Chinese data can be a little flexible, so its reasonable to expect the GDP and perhaps these other data 'around' 0200)
September Retail Sales y/y, expected is +10.8%, prior was +10.8%
- (also September Retail Sales YTD y/y, expected is +10.5%, prior was +10.5%)
September Industrial Production y/y expected is +6.0%, prior was +6.1%
- (And September industrial production YTD y/y expected is +6.3%, prior was 6.3%)
September Fixed Assets (excluding rural) YTD y/y, expected is +10.8%, prior was +10.9%
While most focus will be on the headline GDP, these other data points are not minor and will be heeded.
Fixed asset investment, for example, is a driver of demand for metals, commodities, labour (employment is a critical goal for Chinese authorities, see the quote from Li Keqiang, above) and much more ... its been under pressure from the cooling property sector). There are a number of different combinations of how the data releases could play out, but, in general, misses will see hopes for more stimulus stoked.
Sources: 
