🕯Slowing China’s Growth as Expected🕯

The latest GDP reading from China is less than expected on the backdrop of deleveraging as the government curbs debt growth in the property sector, and the power cuts have caused factories to shut down. Collectively, it took a toll on the economy.

GDP had increased by 4.9% for the quarter, less than the expected 5.2%. Both domestic and abroad conditions remain challenging. The domestic recovery has been wobbling and uneven. The curb on property sector debt through a limit on mortgage lending had slowed the pedal on new construction projects as it had declined for the 6th straight month.

⏳Triplets of Headwinds🔭

Central to this dim outlook is the missing 3 bond payments by China Evergrande as it struggles to stay afloat with a whopping $305 billion debt load. Then came the power cut by the government to conserve energy which hit industrial production. In perspective, industrial production barely increased compared to its August level.

The third barrier is the outburst of Covid-19 cases where zero tolerance on the virus results in multiple strict local regulations that further hampered business activity.
Pika World expects that the Chinese economy will continue to slow down. The policy challenges will hit the market, and that the high base effects from last year are a hurdle to cross for investors.

Nonetheless, Pika World is not too pessimistic about the Chinese economy, given that consumer spending proves resilient. Retail sales were up 4.4%, which beat expectations. Our outlook will be dependent on two broad factors: how the government and central bank work together to combat slowdown and the degree of monetary easing to alleviate short-term weak prospects.

💎Bitcoin: Now you can join the Party💎

Proshares will be launching the first US ETF on Tuesday (today), which tracks Bitcoin prices. The new product will provide consumers who are too nervous about buying Bitcoin directly and wishing to add to their stocks and bond portfolio.

Essentially, The Bitcoin Strategy ETF (BITO) will invest in futures contracts, which is betting on the future movement of Bitcoin. However, it is essential to note that while the futures track Bitcoin prices very closely, they are not the same as the actual Bitcoin price.

📮What’s on the Menu Today?

At 8.30 pm, we will have the Building Permits for September, which we expect at 1.68M, down from 1.721M in the prior period.

Key members of the FOMC continues to speak. We have Daly speaking at 11 pm, and Bowman speaks at 1.15 am. Bostic will be speaking at 2.50 am, and Fed Waller will speak at 3 am.

It is 19 October, Tuesday, 7.25 am in Singapore and 7.25 pm in New York. As we begin a new trading session, we wish all Pika World friends a profitable week ahead!