August Activity Data Unlikely To Change Weaker 2022 Narrative

Tomorrow delivers the August round of activity data, although it would take some big surprises to shift the weaker 2022 narrative. On tap is new home prices, IP, retail sales, fixed asset investment (FAI), property investment and the unemployment rate.

• House prices have declined m/m for the past year, but there is no consensus estimate for the August outcome.
• IP growth is expected to be unchanged at 3.8% y/y. Recall the manufacturing PMIs remained in contraction in August.
• FAI is expected to moderate further to 5.5% y/y (from 5.7% y/y), weighed by property investment (-7.0% y/y forecast, from -6.4%).
• Retail sales are expected to show improvement to 3.2% y/y, from 2.7%. Services PMIs surprised on the upside in August, albeit easing from July levels. Finally, the jobless rate is forecast to be unchanged at 5.4%.
• The broader consensus continues to revise down 2022 growth forecasts for China (now at 3.5%). Earlier this week we also had fresh stimulus measures announced after a State Council meeting
• The PBoC will provide 200bn yuan in special relending funds to banks to boost loans to companies, while SMEs will be able to defer tax payments for another 4 months.