China’s data miss points to weaker Q4 growth: China A50, STI

Retail sales and investment were lower in November for the world’s second largest economy which points to further headwinds for growth this quarter.

Charts (2)

Fixed-asset investment rose at a slower rate for the ninth consecutive month in November. Rising 5.25% ytd (year to date) compared with 6.1% previously it has fallen from a high of 12.6% just five months ago. State-owned investment fell to 3% ytd and private investment fell to 7.7%. In both cases, the rate of investment has diminished over recent months and looks set to slide further as we head into 2022. Consumption was also lower with retail sales falling to 3.9% and missing forecasts of 4.6% and down from 4.9% y/y. With numbers coming in this consistently weak it beckons further easing for fiscal and monetary policy as we head into the new year.


Read our guide on the PBOC (People's Bank of China) and inflation    


Bulls eye 17k on the China A50

On Monday the China A50 index rose to a near-4 month high. Yet its inability to hold onto those initial gains meant that the index closed the day with a bearish pinbar, and back below key resistance to warn of a bull-trap. However, we see this as a minor setback as opposed to a meaningful top.


The rally from the December low was seen with conviction and its pullback from the high is trying to form a base above the 200-day eMA. Even if price retrace further, we are quietly confident a base may form above or around 16,000 and for it to retain its bullish trend structure overall. Furthermore, a bullish trend is now being carve out with increasingly bullish momentum. A daily close above 16,450 and brings the upper channel trendline into focus for bulls.

Volumes not supportive of STI’s rally

We noted in a previous report that Asian indices appeared set to bounce, although we weren’t quite as sure as to how high. Singapore’s premier index (STI) may have answered that question with its bearish engulfing candle on Monday. The bearish Marabuzo candle closed at the low od the day and was its most volatile (and bearish) session since the November 30th low. Ultimately momentum has realigned with the bearish move from the November high, and volumes during the rise from 3040 lows have been below average which suggests the bounce is corrective.


Therefore, our bias remains bearish beneath this week’s high / 50% retracement level. We may find 3100 holds as support initially as it is a round number near the 200-day eMA, but whilst prices remain below 3162 then we suspect another dip towards the 3017 – 3038 lows remain a possible scenario.



How to trade with

Follow these easy steps to start trading with today:

  1. Open a account, or log in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account