DeepDive: Data Dump November 2023

China’s macro data were mixed in October. Household loans continued to point to consumer caution and total retail sales didn’t look as good as the raw data print suggests. Low domestic price pressures and good CPI news out of the US should leave more room for targeted policy easing, as the risk of interest rate differentials widening materially should ease somewhat. Our latest DeepDive has more.

Retail sales rose 7.6% on last year’s low base of -0.5%, beating low market expectations. While the print was largely cheered by the market yesterday, we take a different view. The two-year average of this year and last year’s October data, meant to smooth out some of the distorting effects of the low base, was only 3.5%, down from 4% in September. Before the pandemic, retail sales grew an average of 8.5% per month between 2018 and 2019.