OctaFX | OctaFX Forex Broker
Open trading account

China: Expect 50bp RRR cut/quarter until Q4 2015 - Nomura

FXStreet (Bali) - Following weak Chinese data over the weekend, Nomura Economists now expect Q3 growth of 7.2% and one 50bp RRR cut per quarter from Q3 2014 to Q4 2015.

Key Quotes

"Core activity data weakened significantly in August, with industrial production and fixed asset investment growth falling to 6.9% y-o-y (from 9%) and 16.5% y-o-y (ytd; from 17%), respectively."

"The property sector correction deepened, with floor space sold declining at a faster pace of 8.3% y-o-y (ytd) after a decline of 7.6% in July."

"We cut our Q3 GDP growth forecast to 7.2% y-o-y from 7.5%, and still see downside risks to this forecast."

"Because we expect more aggressive policy easing, we maintain our 7.6% Q4 growth forecast, which would result in a slightly lower full-year 2014 growth forecast of 7.4% (Previous: 7.5%)."

"We now expect one 50bp RRR cut in each quarter from Q3 2014 through Q4 2015. It is not our base case, but if growth decelerates further in coming months, we would expect further, substantial easing measures, including an interest rate cut."

AUD/USD en-route to 0.90 after poor China data - Westpac

Jonathan Cavenagh, FX Strategist at Westpac, reviews the latest disappointing Chinese data over the weekend, noting that we could continue to see softer data momentum for a number of weeks.
Read more Previous

Aussie nears $0.90 as China data weighs

AUD/USD is trading heavy in the early stages of the Asian session, en-route to accumulate a 6th day of sharp losses following very disappointing Chinese data over the weekend, with the rate barely holding above 0.90.
Read more Next
Start livechat