On Monday, the China's National Bureau of Statistics published the GDP data which grew 4.9 percent year-over-year in the third quarter of 2021. That is a declining trend. 

That's down from 7.9 percent growth in the previous quarter, and below the expectations of 5.2% growth. This GDPslowdown does not fully reflect the bad conditions. 

The decline was caused more by a correction than a sharp rebound in the first quarter. Even so, the analysts remain wary of global and domestic risks in the future.

It is especially those which could threaten the pace of China's economic recovery going forward. The national economy as a whole maintained recovery momentum throughout the three quarters of this year. 

Other Economy Data is Slowing Down

However, it should be noted that the uncertainty that occurs in the international sphere and the uneven recovery of the domestic economy are the challenges faced today.

That was stated by Fu Linghui, an the NBS spokesman in a note. In a separate release, China's Retail Sales data reported an increase of 4.4 percent on an annualized basis in September.

That was higher than the 2.5% increase the previous month. But if you look broadly, China's retail sales trend has continued to hit in recent months. 

That comes as China's recent consumer sentiment continues to slump lately. Meanwhile, the Industrial Production there slowed from 5.3% to 3.1% in September period this year. 

The Impressive Progress of Economy in China

This slowdown is inseparable from the increase in raw material prices that make the production costs are more expensive and lower market demand. There is another thing. 

The Fixed Asset Investment also slowed from 8.9% to 7.3 percent, while unemployment rate data decreased 0.2% to 4.9% in September. What does it mean for the progress so far? 

Broadly speaking, the China's own economy has actually chalked up a very impressive performance this year. The pace of recovery is even higher than other G20 member countries. 

However, the economy there could potentially face risks from a property market slump, an energy crisis, weak consumer sentiment and rising global raw material prices.

Meanwhile, US dollar is Really Strong 

The US dollar index (DXY) climbed back toward its year-long high. When the news was written at the beginning of the European session (October 18), DXY was sticking around 0.2 percent

It climbed to the range of 94.10s. The commodity currencies corrected, as did the pound, euro, and Japanese yen. The yield on the 10Y United States Treasury note was firmly at 1.605%.

Meanwhile, its 5-year bond yield rose to a high record since February 2020. Despite the absence of rate hike signals in the America’s inflation data and last week's FOMC minutes, more market participants are betting that the Fed will raise rates.

It is especially as early as next year because that is the most possible time. The America's inflation outlook also led the experts to raise expectations of a Fed rate hike. 

Tapering may be Done as Quickly as Possible

The Danske Bank even suspected that the Fed would raise the interest rates twice in the second half of 2022. So many analysts are also agree with that thing. 

The Governor of the Bank of England (BoE) has recently been increasingly actively promoting plans for a rate hike to cope with a surge in UK inflation. However, the pound is also likely to conquer.

It is especially versus the US. We are not sure that the recent rise in GBP will be sustained against the USD. The Fed has confirmed this week that it is on track to carry out QE tapering faster than expected. 

It is likely to start from mid-November or mid-December, and end around the middle of next year. That should keep upward pressure on the America and the short-term yields going forward.