2 Feb 2015
Contractions in PMI’s hinting at further easing by PBoC? – MP
FXStreet (Barcelona) - Stuart McPhee, Currency Analyst at MarketPulse, comments on China’s PMI releases, and further cites Citi economists view that the soft PMIs indicate towards a probable RRR cut by PBoC.
Key Quotes
“Twin purchasing managers’ index (PMI) surveys for January released in the past 48 hours showed contractions in China’s factory activity. The government’s official PMI stood at 49.8, a more than two-year low, while HSBC’s private survey came in at 49.7, its second month below the 50 level that separates expansion from contraction.”
“Other data over the weekend showed growth in the services sector dropped to a one-year low in January.”
““We think the PMIs opened the window for a broad 50 basis-point RRR (reserve ratio requirement) cut in the first quarter,” said economists at Citi in a recent report, adding that the last round of country-wide RRR cuts was triggered by a below-50 PMI reading in late 2011.”
Key Quotes
“Twin purchasing managers’ index (PMI) surveys for January released in the past 48 hours showed contractions in China’s factory activity. The government’s official PMI stood at 49.8, a more than two-year low, while HSBC’s private survey came in at 49.7, its second month below the 50 level that separates expansion from contraction.”
“Other data over the weekend showed growth in the services sector dropped to a one-year low in January.”
““We think the PMIs opened the window for a broad 50 basis-point RRR (reserve ratio requirement) cut in the first quarter,” said economists at Citi in a recent report, adding that the last round of country-wide RRR cuts was triggered by a below-50 PMI reading in late 2011.”