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22 May 2014
Asia EM Express: China PMI Manufacturing at 5-month high in May
FXStreet (Łódź) - China's HSBC PMI Manufacturing data, strongest since December, surprised to the upside on Thursday, boosting hopes that the country's economic slowdown was starting to reverse.
According to HSBC's economist Qu Hongbin: "Some tentative signs of stabilization are emerging, partly as a result of the recent mini-stimulus measures and lower borrowing costs" introduced by the PBOC. The expert suggested however that more action was needed to stimulate growth further.
Economic data
China's preliminary HSBC Manufacturing PMI data showed that contraction slowed down in May to 48.1 from 49.7 in April, beating expectations of remaining unchanged. In the opinion of Prashant Newnaha, Asia-Pacific Macro Strategist at TD Securities “the data today suggests the pace of slowdown is easing with no immediate significant downside risk to the Government’s 7.5% GDP growth target.”
Malaysia's annual CPI growth eased slightly to 3.4% in April, from 3.5% in March, against forecasts of staying at the same level.
Euben Paracuelles and Lavanya Venkateswaran comment: „There is one more inflation print before this BNM meeting, in which we expect inflation to remain stable. For the full year, we reiterate our CPI inflation forecast of 3.7%, which reflects sustained strength in GDP growth and another round of fuel subsidy rationalization by Q3.”
The Taiwanese Unemployment Rate slid to 4.04% in April from 4.06% in March.
Technicals
On Thursday USD/CNY was up 0.02% at 6.2349.
On Wednesday the USD/CNY daily FXStreet Trend Index was slightly bearish, with the OB/OS Index neutral. RSI was at 52 at the last close, and has edged up to 54 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 476 pips, with ATR (14) shrinking at 84 pips. The 1D 200 SMA was at 6.1246, while the 1D 20 EMA was at 6.2340.
The Westpac Institutional Bank team of analysts offer their short-term outlook for several Asia EM currencies: “The bounce in China’s PMI could help put a lid on USD/CNY, joining much of USD/Asia in trading heavily. INR is due for consolidation after its election-driven surge. KRW remains in strong demand, with Korea’s fundamentals still attractive.”
According to HSBC's economist Qu Hongbin: "Some tentative signs of stabilization are emerging, partly as a result of the recent mini-stimulus measures and lower borrowing costs" introduced by the PBOC. The expert suggested however that more action was needed to stimulate growth further.
Economic data
China's preliminary HSBC Manufacturing PMI data showed that contraction slowed down in May to 48.1 from 49.7 in April, beating expectations of remaining unchanged. In the opinion of Prashant Newnaha, Asia-Pacific Macro Strategist at TD Securities “the data today suggests the pace of slowdown is easing with no immediate significant downside risk to the Government’s 7.5% GDP growth target.”
Malaysia's annual CPI growth eased slightly to 3.4% in April, from 3.5% in March, against forecasts of staying at the same level.
Euben Paracuelles and Lavanya Venkateswaran comment: „There is one more inflation print before this BNM meeting, in which we expect inflation to remain stable. For the full year, we reiterate our CPI inflation forecast of 3.7%, which reflects sustained strength in GDP growth and another round of fuel subsidy rationalization by Q3.”
The Taiwanese Unemployment Rate slid to 4.04% in April from 4.06% in March.
Technicals
On Thursday USD/CNY was up 0.02% at 6.2349.
On Wednesday the USD/CNY daily FXStreet Trend Index was slightly bearish, with the OB/OS Index neutral. RSI was at 52 at the last close, and has edged up to 54 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 476 pips, with ATR (14) shrinking at 84 pips. The 1D 200 SMA was at 6.1246, while the 1D 20 EMA was at 6.2340.
The Westpac Institutional Bank team of analysts offer their short-term outlook for several Asia EM currencies: “The bounce in China’s PMI could help put a lid on USD/CNY, joining much of USD/Asia in trading heavily. INR is due for consolidation after its election-driven surge. KRW remains in strong demand, with Korea’s fundamentals still attractive.”