China: Policy changes expected in response to weak May data - Nomura
|Analysts at Nomura suggest that China is now feeling the pinch from deleveraging, and some policy changes are expected from Beijing.
Key Quotes
“Although the year-on-year growth rates of industrial production, investment and retail sales all slowed in May (from April) and surprised the markets on the downside, these readings are in line with our views that end demand has been getting increasingly weaker due to the rapidly shrinking credit supply from the shadow banking sector, and the rebound in IP growth in April was just a temporary blip on suppressed production in the winter.”
“We do believe deleveraging is needed for China, but we also know that Beijing cares a lot about growth stability, and there might be a more sustainable way to deleverage. We expect Beijing to introduce more moderate easing measures in coming months, and view the likelihood of an RRR cut in the next two months as quite high.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.