Positive March economic data calms market fears

Singapore

A SLEW of positive economic data in China and elsewhere has calmed market nerves and caused some economists to predict a temporary upturn in the global economy.

However, structural issues in China such as state-owned enterprise (SOE) debt, a global trade slowdown, and worries over a mid-year Fed hike might mean a short-lived financial market rally, they said.

Weak global economic growth remains the base case of most economists due to tepid demand and a structurally slowing China.

Yao Wei, French bank Societe Generale's chief China economist, said in a briefing last week that "the stars are aligned for a calm H1".

Housing data suggests that prices are not only rising in first-tier cities, where supply has been tight, but also in smaller cities such as the third-tier ones, where average prices have been falling since mid-2014. The government also seems…