China’s economy expanded 1.1% in the first quarter of 2016 from the fourth quarter of last year, National Bureau of Statistics data showed, missing analysts forecasts.

The slower-than-expected quarterly growth rate comes amid other signs the Chinese economy is stabilizing in the first quarter, including positive surprises from trade, inflation, output and credit.

Analysts had expected quarterly growth of 1.5% for the first quarter, but the statistics bureau did not release quarterly figures when it issued annual figures on Friday.

“The 1.1% growth rate clearly illustrates that China’s economy still faces downward pressures,” Zhou Hao, senior economist at Commerzbank, wrote in a research note on Monday.

“If we calculate the seasonally adjusted GDP growth based on the qoq numbers, we find that there is a big gap (0.4 percent point) between headline GDP growth (non-seasonally adjusted) and the seasonally adjusted GDP growth. As economists, we always prefer the seasonally adjusted qoq numbers, which better tell the underlying growth momentum,” he added.

http://fortune.com/2016/04/18/china-quarterly-economic-growth/?utm_campaign=Contact+SNS+For+More+Referrer&utm_medium=twitter&utm_source=snsanalytics

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China's bold deal to ditch its disputed export tax rebates on some niche aluminum and steel products could flood the saturated global market, as producers scramble to sell excess metal ahead of the changes, prolonging the industry's pain, traders said.

While a rush to offload unwanted product may be a knee-jerk reaction and last a short time, any increase in shipments from the world's top producer would likely stir concerns about the world glut that has led to the industry's worst crisis in a generation.

It would also hurt domestic and international prices, which are languishing at their lowest levels in years. The world's second-largest economy accounts for half of global steel and aluminum output.

To ease trade friction with Washington, Beijing agreed on Thursday to scrap a program that has provided export subsidies of some $1 billion over three years to a range of sectors from aluminum to textiles.

U.S. regulators gave few other details on the types of metal product or when the steps would take effect, but it was widely welcomed as a small step toward creating a more level playing field for metal producers across the globe.

It could, for instance, do away with the country's 13-percent value-added tax rebate on semi-fabricated aluminum products that has spurred exports and complaints that China is exporting its excess capacity, hurting prices and damaging Western producers like Century Aluminum Co.

While waiting for more details, aluminum traders in Asia said they would still sell excess material abroad, and may even pick up the pace of deals before any clampdown.

"There's ... bound to be a flood of exports running up to the implementation. In aluminium and steel, there are enough stocks to feed an export boom," said Caroline Bain, senior commodities economist at Capital Economics in London.

One source said the deal was more of a public relations stunt after congressional hearings this week with U.S. steel and aluminum companies including United States Steel Corp.

That is because it does little to tackle complaints from the European and U.S. steel and aluminum makers that Beijing is propping up its domestic industries through indirect subsidies, like low-cost energy, interest-free loans and free land.

"On the surface, it sounds like a big move. But I don't know if it's just another rule that will be ignored," said Lloyd O'Carroll, senior analyst with CRU Group in Richmond, Virginia.

The tax reform was limited in scope too - specialty steel products, like stainless steel and super alloys used by the aerospace and automotive sectors, only account for about 2 percent of the 1.6 billion-tonne global steel market.

While the 40 million-tonne aluminum market is smaller, the effect of the policy change is potentially greater as it could include a broader range of products from plate and sheet used by the automotive sector to foil.

http://www.reuters.com/article/usa-china-trade-metals-idUSL2N17H2ON

U.S. industrial production fell more than expected in March as manufacturing and mining production decreased, the latest indication that economic growth braked sharply in the first quarter.

Industrial output declined 0.6 percent last month after a downwardly revised 0.6 percent drop in February, the Federal Reserve said on Friday. Industrial production has fallen in six of the last seven months.

Economists polled by Reuters had forecast industrialproduction slipping only 0.1 percent last month after a previously reported 0.5 percent drop in February.

Industrial production fell at an annual rate of 2.2 percentin the first quarter after decreasing at a 3.3 percent pace in the fourth quarter. The report joined data on retail sales, business spending, trade and wholesale inventories in suggesting that economic growth slowed to crawl at the turn of the year.

Growth estimates for the first quarter are as low as a 0.2 percent annualized rate. The economy grew at a 1.4 percent rate in the fourth quarter. But given a buoyant labor market, the ebb in growth is likely to be temporary.

U.S. financial markets were little moved by the data.

The industrial sector has been undermined by a slowingglobal economy and robust dollar, which have eroded demandfor U.S. manufactured goods. It is also being weighed down by lower oil prices that have undercut capital investment inthe energy sector, as well as an inventory correction.

But there are signs the worst of the industrial sector downturn is over, with recent manufacturing surveys turning higher. In addition, the dollar's rally has fizzled and oil prices appear to be stabilizing.

Last month, manufacturing output fell 0.3 percent, the biggest decline since February 2015, after slipping 0.1 percent in February. Manufacturing was dragged down by motor vehicle and parts production, which plunged 1.6 percent after rising 0.8 percent the prior month.

For the first quarter, manufacturing output rose at a 0.6 percent rate. In March, there were also decreases in the output of electronic equipment, appliances and components.

Mining production tumbled 2.9 percent as oil and gas welldrilling plummeted 8.5 percent after diving 15.8 percent in February. Last month's drop in mining output was the largest since September 2008, when output was curtailed because of hurricanes. Mining production has declined in each of the last seven months.

A plunge in oil prices since June 2014 has hurt the profits of oil-field companies like Schlumberger (SLB.N) and Halliburton (HAL.N), leading to deep cuts in their capital spending budgets.

Unseasonably warm weather in March hurt utilities production, which fell 1.2 percent after declining 3.6 percent in February.

With output declining last month, industrial capacity use fell 0.5 percentage point to 74.8 percent, the lowest level since August 2010. Officials at the Fed tend to look at capacity use as a signal of how much "slack" remains in the economy and how much room there is for growth to accelerate before it becomes inflationary.

http://www.reuters.com/article/us-usa-economy-industrialoutput-idUSKCN0XC1KP

As The NY Fed notes:

Business activity expanded for New York manufacturing firms for the first time in over a year, according to the April 2016 survey. After remaining in negative territory for seven months, the general business conditions index rose to a reading slightly above zero last month, and climbed nine more points to reach 9.6 in April. Thirty-one percent of respondents reported that conditions had improved over the month, while 22 percent reported that conditions had worsened. After a steep gain last month, the new orders index edged up two points to 11.1, pointing to an increase in orders. The shipments index edged lower but, at 10.2, still signaled a modest increase in shipments. The unfilled orders and delivery time indexes both came in close to zero. The inventories index was -4.8, indicating that inventory levels were slightly lower.

The prices paid index rose sixteen points to 19.2, suggesting that input prices increased at a significantly faster pace than last month. The prices received index, up nine points to 2.9, showed a small increase in selling prices. The index for number of employees edged up to 2.0, indicating that employment levels remained fairly steady.

http://www.zerohedge.com/news/2016-04-15/empire-fed-prints-highest-over-year-are-feds-global-concerns-easing

Brazil's leftist President Dilma Rousseff suffered a humiliating loss in a crucial impeachment vote in the lower house of Congress on Sunday and is almost certain to be forced from office months before the nation hosts the Olympics.

Fireworks lit up the night sky in Brazil's megacities of Sao Paulo and Rio de Janeiro after the opposition comfortably surpassed the two-thirds majority needed to send Rousseff for trial in the Senate on charges of manipulating budget accounts.

The floor of the lower house was a sea of Brazilian flags and pumping fists as dozens of lawmakers carried in their arms the deputy who cast the decisive 342nd vote, after three days of a marathon debate.

The final tally was 367 votes cast in favor of impeachment, versus 137 against, and seven abstentions. Two lawmakers did not show up to vote.

Brazilian financial markets were expected to open higher on Monday after the vote - a major step toward ending 13 years of the left-leaning Workers' Party rule in the world's ninth largest economy.

If the Senate now votes by a simple majority in early May to proceed with the impeachment, as expected, Rousseff would be suspended from her post and be replaced by Vice President Michel Temer as acting president, pending her trial. Temer would serve out Rousseff's term until 2018 if she is found guilty.

The impeachment battle, waged during Brazil's worst recession since the 1930s, has divided the country of 200 million people more deeply than at any time since the end of its military dictatorship in 1985.

It has also sparked a bitter battle between the 68-year-old Rousseff and Temer, 75, that could destabilize any future government and plunge Brazil into months of uncertainty.

Despite anger at rising unemployment, Rousseff's Workers Party can still rely on support among millions of working-class Brazilians, who credit its welfare programs with pulling their families out of poverty during the past decade.

"The fight is going to continue now in the streets and in the federal Senate," said Jose Guimaraes, the leader of the Workers' Party in the lower house. "We lost because the coup-mongers were stronger."

Opinion polls suggest more than 60 percent of Brazilians support impeaching Rousseff, Brazil's first female president, less than two years after she won reelection in 2014.

While she has not been accused of corruption, Rousseff's government has been tainted by a vast graft scandal at state oil company Petrobras and by the economic recession.

Hundreds of thousands of demonstrators from both sides took to the streets of towns and cities across the vast nation, in peaceful protests. Millions watched the congressional vote live on television in bars and restaurants, in their homes or on giant screens in the street, as the soccer-mad nation does for major football matches.

http://www.reuters.com/article/us-brazil-politics-idUSKCN0XE05M

IMF Panel Calls for ‘More Forceful’ Policies to Boost Growth

Global finance ministers and central bankers pledged to step up their efforts to support growth, as chances rise of a broader slowdown and risks including refugee crises and a potential U.K. exit from the European Union threaten the world economy.

“Downside risks to the global economic outlook have increased since October, raising the possibility of a more generalized slowdown and a sudden pull-back of capital flows,” the International Monetary Fund’s top policy advisory committee said in a statement following a meeting on Saturday in Washington. To achieve strong global growth, “we will employ a more forceful and balanced policy mix,” the panel said.

The statement reflects policy makers’ concern that expansion will slow, after the IMF this week downgraded its global outlook again, warning that a prolonged period of slow growth has left the world economy at risk of slipping into stagnation.

Using all policy tools “is vital to stimulate actual and potential growth, enhance financial stability and avert deflation risks,” according to the communique from the panel, known as the International Monetary and Financial Committee. The panel advises the board of governors of the 189-member nation IMF.

After a separate gathering at the IMF’s spring meetings in Washington, Group of 20 finance ministers and central bankerssaid on Friday that risks to the global recovery have stabilized even as threats to the outlook remain, including terrorism and the U.K.’s potential exit from the European Union.

In nods to emerging markets, the IMFC said the fund will discuss the reporting of official reserves in Special Drawing Rights, the IMF reserve-currency unit of account that’s adding China’s yuan to its basket this year. In addition, the IMFC said the fund’s next review of voting shares should be completed by late 2017, and should increase the power of emerging market and developing countries.

The latest governance change was approved in December by U.S. lawmakers. It gave more of a voice to emerging markets such as China and India in exchange for greater congressional oversight of the fund.

http://www.bloomberg.com/news/articles/2016-04-16/imf-panel-calls-for-more-forceful-policies-to-boost-growth

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