9 Jul 2015
China next worrisome focus beside Greece? - Rabobank
FXStreet (Guatemala) - In respect of China, Australia's largest trading partner, Jane Foley, Senior Currency Strategist at Rabobank explained that weak demand for products is linked to slowing growth in China.
"In recent weeks the outlook for Chinese growth has become even more fragile given the $2.8 bln rout in the country’s stock market. Despite the fact that the Chinese authorities has been taking measures to restore confidence in stocks, price action suggests that investors are far from convinced. Further sharp declines in the equity market has the potential to increase downside risk to Chinese growth potential," adding, "This undoubtedly would send ripples throughout the global economy We see the combination of weak commodities prices and slow Chinese growth as making the prospects of further rates cuts from the RBA more likely going forward."
"In recent weeks the outlook for Chinese growth has become even more fragile given the $2.8 bln rout in the country’s stock market. Despite the fact that the Chinese authorities has been taking measures to restore confidence in stocks, price action suggests that investors are far from convinced. Further sharp declines in the equity market has the potential to increase downside risk to Chinese growth potential," adding, "This undoubtedly would send ripples throughout the global economy We see the combination of weak commodities prices and slow Chinese growth as making the prospects of further rates cuts from the RBA more likely going forward."