Chinese housing market positivity likely to fade in 2018

The Chinese economy is witnessing solid growth and low inflation. This year, the housing market is expected to slow down to turn sentiment less positively. Both domestic and external demand has been favorable and this would likely continue for a while into 2018, noted Nordea Bank in a research report.

But the growth momentum is expected to turn less positive this year, as the housing market positivity fades as a result of tight housing policies. The trade outlook is bright against the backdrop of the positive global outlook for this year. Trump continues to be a wild card and his protectionist stand just helps promoting China as the new world leader to defend globalization, stated Nordea Bank.

China’s mountain of debt continues to be high but has not grown higher in 2017, which is good news. But cyclical tailwinds are not sustainable and the risk debt continues to be material unless the government takes serious measures in lowering wasteful projects and state company bailouts.

“The spot CNY rate continues to follow the broad-based USD index. Our expectation of a strong USD in the near term may push the USD/CNY higher”, said Nordea Bank.

At 16:00 GMT the FxWirePro's Hourly Strength Index of Chinese Yuan was highly bearish -161.795, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 63.6634. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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