China: Prudent and neutral monetary policy stance ahead – Nomura

The slight dip in the China CLI, together with the rising CGSI and the improving heat map, implies the measured growth slowdown may proceed in a gradual and shallow manner in December, suggests the research team at Nomura.

Key Quotes

“Our China Monetary Policy Signal Index suggests monetary policy will remain prudent and neutral in the months ahead.”

“Does this change our economic view? No. The long-term downward trend of our proprietary indices adds to our conviction of a continued growth slowdown in the quarters ahead. We maintain our forecast of real GDP growth to ease to 6.6% y-o-y in Q4 2017 from 6.8% in Q3.”