Although Beijing announced some new stimulus measures, it appears markets prefer to focus on the "great uncertainty" that Chinese officials see ahead (due to the coronavirus) leading to a decision to not release a target for economic growth has thrown the "v-shaped" recovery narrative out the window (for now).
“We have not set a specific target for economic growth this year,” Li said, speaking in the Great Hall of the People.
“This is because our country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the world economic and trade environment.”
WTI has crashed over 9%, with the July contract trading back down at a $30 handle...
And US futures are notably weaker with Nasdaq leading the drop...
The shifting away from a hard target for output growth breaks with decades of Communist Party planning habits and is an admission of the deep rupture that the disease has caused.
“The nascent demand recovery is still vulnerable, and the drop in prices today is an injection of reality,” said Victor Shum, vice president of energy consulting at IHS Markit in Singapore.
“China not giving a GDP target means they are not quite certain about the recovery yet.”
The question marks over China’s economy come as relations with the US deteriorate dramatically, clearly damaging the "v" or "u" shaped recovery narrative that has seemed to dominate both equity and oil markets in recent days.