China Home Prices Ease Slightly but Still Deep in the Red
China's home prices fell 3.3% year-over-year in June, a modest improvement from May's 3.5% drop — but the slump is far from over.
China's battered housing market posted a small sign of life in June, with new home prices falling 3.3% year-over-year — a tick better than the 3.5% decline recorded in May. On a monthly basis, prices slipped just 0.1%, improving from the prior month's 0.2% dip. Don't pop the champagne yet, though. This is still the fourth consecutive year of falling home prices, and marginal improvements in the rate of decline aren't the same as a real recovery.
For traders, the read here is nuanced. The deceleration in the pace of decline is a real data point — it suggests Beijing's steady drip of stimulus measures may be preventing a full-on freefall. But the trend remains firmly negative, and any asset class tied to Chinese domestic demand deserves serious scrutiny right now. Think commodity plays, luxury goods exposure, and any company banking on a Chinese consumer rebound.
Read more Nasdaq Climbs as Amazon Surges, Apple Drags on Weak Outlook →
The bigger picture comes into clearer focus later in the session when China drops its full suite of June economic activity data alongside Q2 GDP figures. That's the number that will move markets. If growth underwhelms alongside persistently weak property data, the pressure on policymakers to respond aggressively only intensifies. Watch the yuan, iron ore, and copper for the immediate market reaction.
Continue reading at Forexlive
