JGBS: Twist-Steepener, Q1 GDP Beats

On balance beats from the China data, most notably from IP (+7.7%y/y) and retail sales (+5.9%y/y) for March. Q1 GDP y/y better at 5.4% but q/q slightly below (1.2%, versus 1.4% forecast). Property investment still weak, while jobless rate edges down to 5.2%, prior was 5.4%. More details to follow. 

Market reaction mixed, but not large. USD/CNH down a touch, but no follow through, last near 7.3250. AUD/USD up a touch to 0.6355/60. Rest of the USD is weaker though versus the G10, so this may also be a factor. 

Hong Kong equities still down comfortably for the session, HSI last off 1.8%.  

• CHINA MAR INDUSTRIAL OUTPUT +7.7% Y/Y VS MEDIAN +5.8% Y/Y: NBS
• CHINA MAR RETAIL SALES +5.9% Y/Y VS MEDIAN +4.2% Y/Y
• CHINA Q1 FIXED-ASSET INVESTMENT +4.2% Y/Y VS MEDIAN +4.1% Y/Y
• CHINA Q1 PROPERTY INVESTMENT -9.9% Y/Y VS MEDIAN -9.7% Y/Y
• CHINA MAR UNEMPLOYMENT RATE +5.2% VS FEB +5.4%
• CHINA Q1 INDUSTRIAL OUTPUT +6.5% Y/Y VS JAN-FEB +5.9% Y/Y
• CHINA Q1 RETAIL SALES +4.6% Y/Y VS JAN-FEB +4.0% Y/Y
• CHINA Q1 2025 REAL GDP +5.4% Y/Y VS MEDIAN +5.2% Y/Y: NBS
• CHINA Q1 2025 REAL GDP +1.2% Q/Q VS MEDIAN +1.4% Q/Q

China should promote consumption, expand domestic demand, and strengthen domestic circulation with greater effort, calmly responding to the difficulties and challenges brought about by external shocks, said Premier Li Qiang. Authorities must make full use of policies to cope with the adverse impact on foreign trade by coordinating domestic and international standards and building a platform for high-quality foreign trade products to expand domestic sales, said Li. (Source: China Securities Journal)