1 May 2014
Little China downside risk priced into the AUD - ANZ
FXStreet (Bali) - Daniel Been, FX Strategist at ANZ, notes that despite Chinese PMIs continue to provide evidence of a slow down in the country, there is some signs of improvement.
Key Quotes
"Across a number of measures China’s performance ranks close to the bottom, particularly when compared to its own history."
"We suspect that this is beginning to change: the recent improvement in electricity production provides some hope, and the recent selective RRR cut signals that there is some appetite for easing."
"Should evidence of this improvement grow, it will help emerging market gains, and equities in the region in particular."
"However, we continue to think that the impact it would have on the AUD would be more muted given that at current levels there is little China downside risk priced into the AUD."
Key Quotes
"Across a number of measures China’s performance ranks close to the bottom, particularly when compared to its own history."
"We suspect that this is beginning to change: the recent improvement in electricity production provides some hope, and the recent selective RRR cut signals that there is some appetite for easing."
"Should evidence of this improvement grow, it will help emerging market gains, and equities in the region in particular."
"However, we continue to think that the impact it would have on the AUD would be more muted given that at current levels there is little China downside risk priced into the AUD."