Falls Further After Data

Offshore yuan moves to fresh session lows following data, USD/CNH last up 83 pips at 6.4461.

Retail sales was the big miss at 17.7% compared to consensus 25%. Industrial output missed estimates at 9.8% Y/Y against 10.0% expected, while fixed asset investment was also narrow miss at 19.9% against 20% expected, while the jobless rate fell to 5.1%.

• Consumer spending looks to be a weak point and could hamper the recovery, in April Chinese President Xi noted that the recovery was unbalanced and unstable and said the government will attempt to rectify this. "It is necessary to make use of the current window of opportunity, when pressure on stable growth is relatively small, to promote economic stability and improvement," said Xi. It is unclear how China will attempt to balance the recovery, there are signs that the PBOC is already removing some of its supportive measures; the bank drained at April's MLF and matched maturities this month, and has asked banks to slow down loan growth the effects of which was evident at the latest credit data.