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1 Feb 2015
China: Official PMI drops below 50 - Nomura
FXStreet (Bali) - China's official PMI dropped below 50 over the weekend, confirming weak growth momentum, notes Nomura.
Key Quotes
"The official PMI fell for a fourth consecutive month to 49.8 in January from 50.1 in December, the first sub-50 contractionary reading since September 2012 (Consensus: 50.2; Nomura: 49.8)."
"The decline in the PMI was across board, led by a drop in new orders and output, both falling to their lowest since March 2013."
"Price measures show very strong disinflationary forces, signalling deepening PPI deflation and further declines in CPI inflation in the months ahead."
"With dis-inflation pressure, we expect more policy easing in Q1 2015, including a 50bp cut of the bank reserve requirement ratio. Our new monetary policy signal index is also flashing easing in the coming months."
"We maintain our forecast that GDP growth will slow to 7.1% in Q1 from to 7.3% in Q4 2014, and to 6.8% in 2015."
Key Quotes
"The official PMI fell for a fourth consecutive month to 49.8 in January from 50.1 in December, the first sub-50 contractionary reading since September 2012 (Consensus: 50.2; Nomura: 49.8)."
"The decline in the PMI was across board, led by a drop in new orders and output, both falling to their lowest since March 2013."
"Price measures show very strong disinflationary forces, signalling deepening PPI deflation and further declines in CPI inflation in the months ahead."
"With dis-inflation pressure, we expect more policy easing in Q1 2015, including a 50bp cut of the bank reserve requirement ratio. Our new monetary policy signal index is also flashing easing in the coming months."
"We maintain our forecast that GDP growth will slow to 7.1% in Q1 from to 7.3% in Q4 2014, and to 6.8% in 2015."