China's activity growth likely edged up

China's activity data are likely to have recovered further in May, albeit at a very slow pace. 

Since both the HSBC and official PMI reports indicated some improvement in the manufacturing sector, industrial production (IP) is expected to have grown 6% yoy after 5.9% yoy in April, says Societe Generale. By sector, the recovery should be supported by crude oil production and infrastructure-related industries.

"Fixed asset investment (FAI) growth is forecast to rebound from the record low of 9.4% yoy to 11.2% yoy, mostly due to a positive base effect in manufacturing and housing investment growth. Infrastructure investment, despite a negative base effect, likely strengthened marginally as well amid policy support. Nominal retail sales are expected to have picked up modestly to 10.2% yoy from 10% yoy in April", according to Societe Generale. 

The Ministry of Commerce cut the import tariff for a big range of consumer goods at the end of May. Analysts expects that the impact of this measure will be more visible in H2 data.