China has set a slower-than expected GDP growth target of 5% for this year. The target for last year was 5.5%, but actual GDP growth was only 3%, the second slowest since the 1970s, the Associated Press reported.
The government is aware of a weakening external market which may battle to absorb China's exports at higher levels.
Premier Li Keqiang, China's top economic officials, said, "Uncertainties in the external environment are on the rise. At home, the foundation for stable growth needs to be consolidated, insufficient demand remains a pronounced problem, and the expectations of private investors and businesses are unstable."
Last year, the fiscal deficit was 8% of GDP, which was high. China will raise fiscal spending by 5.6%, which is less than last year, and we expect the fiscal deficit to moderate.
The market was disappointed with the number, expecting a higher target given the reopening of the chinese economy and the pent-up domestic demand.
FXCM's CHN50 basket declined on the news before finding support at the S2 pivot (right). However, the daily chart (right) continues to consolidate in its neutral area between the blue bands.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.