Data Dump In Focus, Pace Expected To Slow

A round trip for USD/CNH on Tuesday saw the pair close around unchanged levels, last down 10 pips at 6.4059.

• Data yesterday showed inbound FDI in China rose 35.4% Y/Y from January to May, the increase is bigger than 30.3% seen in the same period last year.
• Markets will focus on a whole host of Chinese data later in the session; retail sales, industrial production, asset investment and the jobless rate will all be released today, on the schedule for 0800BST/1500HKT. Consensus is for the pace of increase so slow for most data points on fading base effects.
• Goldman Sachs says survey data has augured a slow-down: "IP may have moderated in May as suggested by the slightly lower NBS manufacturing PMI data. Electricity shortage and consequently production suspension in Guangdong province, as well as cooler weather this May compared with last year, both suggest downward bias to year-over-year IP growth. Industrial production is likely to be up 8.7% yoy in May, slowing down from 9.8% yoy in April. Recovery in overall retail sales growth may have continued, although catering sales might have taken a hit from the local outbreak of Covid19 in Anhui and Guangdong provinces. We forecast retail sales to decelerate to 12% yoy in May (vs. 17.7% yoy in April). In contrast, fixed investment growth might have accelerated – construction PMI strengthened, and government bond issuance has also picked up strongly in May. We expect FAI year-to-date year-over-year growth to slow to 17.5% yoy in May from 19.9% yoy in April, but May single month FAI to accelerate to 12.3% yoy from 10.8% yoy in April."