- Today, China’s real activity data came in weaker than expected, putting in doubt earlier positive signals.
- As already published at the end of last week, the October inflation rate had strongly shot up on accelerating food prices while non-food inflation continued to show a lack of demand.
- China’s economic outlook depends very much on the development of the trade war with the US. We assume a “Phase 1” trade deal in December with the looming tariff hike in December to be cancelled.
- However, this will only decelerate China’s slowing and supportive monetary and fiscal policy is still warranted.
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