China GDP Beats, Trade Disappoints

Market Snapshot

Asset	Level	Change
Shanghai Composite	4,045.68	+0.46%
CSI 300	4,722.04	+0.79%
Hang Seng	25,947.32	+0.29%
TAIEX	36,722.14	+1.17%
USD/CNY	6.82	+0.07%
USD/HKD	7.82	-0.12%
Copper	6.04	-0.60%
Brent Crude	98.01	+3.24%
Gold	4,810.90	+0.23%
Bitcoin	75,001.33	+0.26%
China 2Y Govt Yield	-	-
China 10Y Govt Yield	-	-

Prior Economic Events

Data	Prior	Cons	Actual
New Yuan Loans	900,000m	3,400,000m	2,990,000m
Exports Year-over-Year	21.80	8.30	2.50
Imports Year-over-Year	19.80	11.10	27.80
Trade Balance	213,620m	112,000m	51,130m
House Price Index Year-over-Year	-3.20	-	-3.40
GDP Growth Year-over-Year	4.50	4.80	5
Industrial Production Year-over-Year	6.30	5.50	5.70
Retail Sales Year-over-Year	2.80	2.30	1.70
Fixed Asset Investment (YTD) Year-over-Year	1.80	1.90	1.70
GDP Growth Quarter-over-Quarter	1.20	1.30	1.30

Today's Economic Events

Data	Prior	Cons	Time
No events available

China's Q1 GDP growth beat expectations at 5% YoY, signaling resilience amid global headwinds, though retail sales and fixed asset investment softened.
Trade data disappointed with exports up only 2.5% YoY versus consensus 8.3%, while imports surged 27.8% YoY, narrowing the trade surplus to CNY51.13bn.
Equities rose across Greater China, led by Taiwan's TAIEX +1.17%, as yuan firmed post-GDP surprise despite record forex demand pressures.

Yesterday's Recap

Mainland China's Q1 GDP growth accelerated to 5% YoY (cons. 4.8%, prev. 4.5%), with QoQ at 1.3% (cons.

1.3%, prev. 1.2%), reflecting steady infrastructure support despite property drags, as house prices fell -3.4% YoY (prev. -3.2%).

Industrial production edged up to 5.7% YoY (cons. 5.5%, prev. 6.3%), buoyed by manufacturing, but retail sales slowed to 1.7% YoY (cons.

2.3%, prev. 2.8%), signaling weak consumer demand. Fixed asset investment (YTD) dipped to 1.7% YoY (cons.

1.9%, prev. 1.8%), while new yuan loans reached CNY2.99tn (cons. CNY3.4tn, prev.

CNY0.9tn), indicating credit growth amid stimulus signals. Trade figures showed exports +2.5% YoY (cons. 8.3%, prev.

21.8%) and imports +27.8% YoY (cons. 11.1%, prev. 19.8%), yielding a surplus of CNY51.13bn (cons.

CNY112bn, prev. CNY213.62bn), pressured by global slowdowns. Markets advanced: Shanghai Composite +0.46% to 4,045.68, CSI 300 +0.79% to 4,722.04, Hang Seng +0.29% to 25,947.32, and TAIEX +1.17% to 36,722.14, with USD/CNY +0.07% to 6.82.

Hong Kong saw stable USD/HKD at 7.82 (-0.12%), while Taiwan benefited from AI-driven semiconductor optimism. Copper slipped -0.60% to 6.04, contrasting Brent's +3.24% to 98.01 amid Mideast tensions.

The Day Ahead

With no major data releases scheduled for today in Greater China, markets will likely digest yesterday's mixed China figures, focusing on GDP strength versus trade weaknesses. Attention turns to potential PBoC signals on liquidity, especially with recent yuan management adjustments amid global volatility. Hong Kong investors may monitor HKMA updates on stablecoin licenses, following HSBC's approval, which could boost fintech sentiment.

Taiwan's semiconductor sector remains in focus, with global AI demand supporting TAIEX amid warnings of chip shortages. (cont...)

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The Day Ahead (continued)

Broader cross-strait trade flows could influence sentiment, particularly if new export data emerges informally. Overall, a quiet calendar shifts emphasis to global cues like U.S. yields and oil prices.

Other Economic Notes

Mainland China's property sector continues to weigh on growth, with house prices declining further, underscoring the need for targeted stimulus to revive real estate without inflating bubbles. Taiwan's market cap surpassing $4 trillion highlights its AI and semiconductor dominance, overtaking the UK, though supply chain risks from global shortages loom. Hong Kong's banking exposure to Mideast risks remains low, per HKMA, supporting stability amid geopolitical uncertainties.

Global Macro News

Global markets reacted to de-escalation hopes in the Iran war, boosting Asian currencies as the dollar retreated, with China's yuan holding steady post-GDP beat despite doubts on sustainability. Oil prices surged with Brent at 98.01 (+3.24%), posing inflation risks for Greater China's import-dependent economies, particularly mainland manufacturing. Semiconductor shortages, driven by AI and data center demand, are reshaping global supply chains, benefiting Taiwan's TSMC-linked exports but raising costs for China's tech sector.

Sprott's new rare earths ETF excluding China signals diversification away from mainland dominance, potentially pressuring Beijing's resource strategies. Brazil eyes China trade as a lever for its green economy, which could enhance bilateral flows and support mainland import surges. Singapore's dollar may outperform due to deepening yuan links, indirectly aiding Hong Kong's peg dynamics.

Swiss and UK economies face heightened uncertainty from Mideast conflicts, per SNB and reports, amplifying safe-haven flows into Greater China assets like gold at 4,810.90 (+0.23%). Australia's job data sparked rate hike warnings, contrasting with Greater China's easing bias and influencing commodity proxies like copper.

Greater China Central Banks Watch

The PBoC adjusted the USD/CNY reference rate to signal strategic yuan management amid volatility, with the currency firming post-GDP surprise despite record forex demand for imports and investments posing rally headwinds. No immediate MLF or LPR changes were announced, but Q1 data beats reduce urgency for RRR cuts, though State Council may assess war impacts before further liquidity operations. HKMA emphasized low banking exposure to Mideast business, maintaining USD/HKD peg stability at 7.82 with ample aggregate balance, while granting stablecoin licenses to HSBC and others to foster fintech innovation.

Taiwan's CBC held rates steady in recent decisions, focusing on FX interventions to curb TWD volatility amid semiconductor export growth, linked to AI booms that propelled TAIEX higher. (cont...)

Greater China Macro Daily(Beta Mode)