Week in review

• U.S. housing starts fell 1.6% m/m in September
• Japan manufacturing PMI rose to 53.0
• Eurozone PMI composite dropped to 54.3

Week ahead

• Bank of Japan monetary policy meeting
• U.S. 3Q21 GDP, consumer confidence, durable orders
• Eurozone 3Q21 GDP, monetary policy meeting

Thought of the week

For China, some short-term shocks were inevitable given the various policy measures taken since July, and we saw some of those in China’s recent data release. The headline was the real GDP year-over-year (y/y) growth, which was 4.9% against the consensus of 5.5%, raising concerns about China’s short term stability. Retail sales grew by 4.4% y/y, below the 8% pre-pandemic average, which shows how regional Delta outbreaks and supply bottlenecks have disrupted the recovery. Meanwhile, investment activities have been subdued, as we estimate that fixed asset investments declined 2.5% y/y, with a major drag coming from the real estate sector. Economic activities are likely to rebound in 4Q21 as policymakers should continue to provide support, especially to small- and medium-sized enterprises. While investors might need time to digest the near-term regulatory outlook, the long-term structural themes are still supportive for Chinese equities.

China economic data

Source: Wind, China National Bureau of Statistics, JPMorgan Asset Management.
*Estimated with the year-to-date investment and growth figures reported by National Bureau of Statistics.
Data reflect most recently available as of 22/10/21.

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