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Flash PMI to Pressure PBOC on Further Stimulus

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The advance release of the Chinese purchasing manager’s index (PMI) dissapointed last month as it dipped into a 11 month low with a reading of 49.2. The factory sector is struggling to gain traction and get back above 50 which would signal expansion. Economists were expecting it be in the 50.6-8 range. The Chinese government has pushed a new normal for growth expectations from what is seen as a pre-emptive move ahead of missing the 7 percent growth target for 2015.



A below forecast flash PMI of 49.4 would put further pressure on the People’s Bank of China to launch further stimulus measures to avoid the economy slowing down even further. Further rate cuts are expected along with lower reserve requirement ratios for Chinese financial institutions.

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza

@alfonso_forex

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