The Euro gained ground against the Chinese yuan following the release of lower-than-anticipated retail sales data for April. Notably, China’s industrial production data for April was higher than anticipated. However, the market was concerned about consumer spending in China. The Eurozone inflation data for April met estimates. This enabled the EUR/CNY pair to rally from a low of 7.7700 to a high of 7.8586 in the final trading session of last week.
According to the data published by the National Bureau of Statistics (NBS), China’s industrial production rose by 6.70% y-o-y in April, following a 4.50% increase in the previous month, surpassing forecasts of 5.50% growth.
On an m-o-m basis, China’s industrial production inched up 0.97% in April.
The increase was led by a 2% y-o-y growth in the mining sector in April. The manufacturing sector recorded an expansion of 7.50% in the same period. Likewise, the production and supply of electricity, thermal power, gas, and water increased by 5.80% y-o-y in April. The value-added equipment manufacturing industry surged 9.90% y-o-y in April, after growing by 6% in March. Similarly, the value added in high-tech manufacturing jumped 11.30% y-o-y in April, following a rise of 7.60% in the prior month.
With respect to products, the production of 3D printing devices, new-energy vehicles, and integrated circuits increased by 55%, 39.20%, and 31.90%, respectively.
Notably, the manufacturing purchasing managers’ index was 50.40 in April. Also, the production and operation expectation index stood at 55.2%.
The NBS also stated that China’s retail sales grew by 2.30% y-o-y in April to yuan 569.90 billion, following a 3.10% increase in the previous month, missing forecasts of a 3.70% increase.
On an m-o-m basis, China’s retail sales inched up 0.03% in April.
Goods retail sales increased by 2% y-o-y in April to yuan178.40 billion. Also, the retail sales of telecom equipment, sports and entertainment, grain, oil, food, and beverages by enterprises surged 13.30%, 12.70%, 8.50%, and 6.40%, respectively.
Online retail sales surged 11.50% y-o-y in April to yuan 411 billion.
The Eurozone consumer price index rose by 2.40% y-o-y in April, following a similar increase in the previous month. The reported figure is in line with economists’ estimates. In April 2023, Eurozone inflation was 7%.
The prices of non-energy industrial goods inched up 0.90% y-o-y in April. However, the prices for energy declined by 0.60% in the same period. Also, the prices of food, alcohol, and tobacco increased by 2.80% y-o-y in April.
On an m-o-m basis, the Eurozone consumer price index inched up 0.60% in April, following a 0.80% rise in March.
Excluding, food, energy, alcohol, and tobacco, the Eurozone core consumer price index rose by 2.70% y-o-y in April following a 2.90% increase in the previous month. The reported figure, reflecting the lowest level since February 2022, was in line with economists’ estimates.
The mixed economic data from China is expected to keep the EUR/CNY pair range-bound with a slight bullish bias in the near term.
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