22 Jul 2013
Flash: Downside risks to China are building – BBH
FXstreet.com (London) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman & Co notes risks to the downside in the Chinese economy are stacking up.
Key Quotes:
“HSBC flash Manufacturing China PMI for July due out Wednesday, expected at 48.5 vs. 48.2 final June reading”.
“The official reading fell to 50.1 in June while the HSBC reading has been below 50 for two straight months now. HSBC PMI tracks better with IP data, which came in weaker-than-expected at 8.9% y/y in June”.
“It is clear to us that downside risks to China growth are building, especially after Finance Minister Lou said recently that 6.5% growth could be tolerable in the future”.
“USD/CNY continues to trade sideways, and we see this continuing in Q3 and most likely Q4 too”.
Key Quotes:
“HSBC flash Manufacturing China PMI for July due out Wednesday, expected at 48.5 vs. 48.2 final June reading”.
“The official reading fell to 50.1 in June while the HSBC reading has been below 50 for two straight months now. HSBC PMI tracks better with IP data, which came in weaker-than-expected at 8.9% y/y in June”.
“It is clear to us that downside risks to China growth are building, especially after Finance Minister Lou said recently that 6.5% growth could be tolerable in the future”.
“USD/CNY continues to trade sideways, and we see this continuing in Q3 and most likely Q4 too”.