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Chinese recovery data boosts credits

Higher prices for metals and other raw materials squeezed profit levels at factories in China last month, official data shows. File photo by Reuters.

(ATF) Chinese credits extended a winning streak of daily returns to five after data showed the world’s second-largest economy is maintaining its recovery from the pandemic downturn.

The ATF China Bond 50 Index climbed 0.03% Monday to close at 106.89, its highest in more that three months. Returns on the 50 bonds tracked by the gauge have increased 0.19% this month as inflation fears that have given a selloff in bonds this year appeared to ease.

Factory output grew 9.8% in April from a year ago from 14.1% in March, National Bureau of Statistics data showed. Retail sales, meanwhile, rose 17.7% from 34.2% in March.

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Julian Evans-Pritchard, senior China economist at Capital Economics, in a note said month-on-month retail sales growth fell well below its pre-pandemic pace.

“Looking ahead, we think the rebound in consumption should gather pace again in the coming months as the labour market continues to tighten,” he said.

A sub-index of state-owned enterprise (SOE) bonds climbed 0.04%, extending gains to four days and 0.11%. They Financials sub-gauge also rose 0.04%, a sixth day of advances that has seen the measure rise 0.27% a reach a month’s high. 

Mark McCord

Mark McCord is a financial journalist with more than three decades experience writing and editing at global news wires including Bloomberg and AFP, as well as daily newspapers in Hong Kong, Sydney and Melbourne. He has covered some of the biggest breaking news events in recent years including the Enron scandal, the New York terrorist attacks and the Iraq War. He is based in the UK. You can tweet to Mark at @MarkMcC64371550.

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