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26 Apr 2013
Forex Flash: Chinese MNI business sentiment indicator fell from the April flash indicator - Nomura
FXstreet.com (Barcelona) - Nomura economist Zhiwei Zhang notes that the final MNI China business sentiment indicator was 58.5, down from 59.3 in the April flash indicator and up slightly from 58.2 in March.
He adds that both the new orders component and production component dropped from the flash indicator. Further, the MNI business sentiment indicator and the HSBC manufacturing PMI (the flash April number was released on 23 April) are both highly correlated with the official PMI. He comments that as both series have been released, he now expects the official PMI to fall to 50.3 in April from 50.9 in March (Consensus: 50.8). He believes that policy will be tightened ahead to contain financial risks, and his view is supported by recent signals from the government. He finishes by writing, “We maintain our view of a gradual slowdown in real GDP growth throughout 2013, at 7.7% y-o-y in Q1, 7.5% in Q2, 7.4% in Q3 and 7.2% in Q4 (in contrast to consensus, which expects a rebound to 8% in Q2).”
He adds that both the new orders component and production component dropped from the flash indicator. Further, the MNI business sentiment indicator and the HSBC manufacturing PMI (the flash April number was released on 23 April) are both highly correlated with the official PMI. He comments that as both series have been released, he now expects the official PMI to fall to 50.3 in April from 50.9 in March (Consensus: 50.8). He believes that policy will be tightened ahead to contain financial risks, and his view is supported by recent signals from the government. He finishes by writing, “We maintain our view of a gradual slowdown in real GDP growth throughout 2013, at 7.7% y-o-y in Q1, 7.5% in Q2, 7.4% in Q3 and 7.2% in Q4 (in contrast to consensus, which expects a rebound to 8% in Q2).”