China’s macroeconomic data showed a sharper decline in most output indicators in May, but a longer holiday during the month contributed to weaker headline figures. More significantly, key property sector indicators are softening, potentially undermining one of the sources of cyclical stabilization so far in 2019. Exports outperformed expectations due to front-loading ahead of new US tariffs, while the interbank market’s reaction to the takeover of Baoshang Bank creates new risks of a sharper slowdown in overall credit growth later this year.
