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23 Apr 2013
Forex Flash: China - a window of a global demand swoonlet? - Societe Generale
FXstreet.com (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that China’s HSBC ‘Flash’ PMI has heightened the sense that the global economy is in yet another spring-time soft patch.
He adds that the in house SocGen China expert, Wei Yao, believes that the data paints a picture of a painfully slow recovery in China´s manufacturing sector and observes that all major sub-indices retreated, with the export reading leading the rout, down to 48.6 from 50.5 in March to its lowest level in 6 months.
He notes that the importance of the Chinese data is probably in what they tell us about global demand as much as the message about the Chinese economy. He sees that the national PMI data (less volatile than the HSBC ones) seem pretty consistent with the GDP trends and suggest a failure to bounce rather than a further slowdown. Nevertheless, Juckes adds that “the export weakness tells us that demand elsewhere is soft which was suspected anyway), and the on-going re-balancing of the economy continues to argue for potential weakness in industrial (i.e., not gold) commodities.” He thinks the implications for inflation, currencies and emerging market assets will be one of the enduring themes through the coming months.
He adds that the in house SocGen China expert, Wei Yao, believes that the data paints a picture of a painfully slow recovery in China´s manufacturing sector and observes that all major sub-indices retreated, with the export reading leading the rout, down to 48.6 from 50.5 in March to its lowest level in 6 months.
He notes that the importance of the Chinese data is probably in what they tell us about global demand as much as the message about the Chinese economy. He sees that the national PMI data (less volatile than the HSBC ones) seem pretty consistent with the GDP trends and suggest a failure to bounce rather than a further slowdown. Nevertheless, Juckes adds that “the export weakness tells us that demand elsewhere is soft which was suspected anyway), and the on-going re-balancing of the economy continues to argue for potential weakness in industrial (i.e., not gold) commodities.” He thinks the implications for inflation, currencies and emerging market assets will be one of the enduring themes through the coming months.