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All eyes on China's September HSBC flash manufacturing PMI - ING

FXStreet (Łódź) - Tim Condon from ING suggests that one of the most important data releases this week is China's HSBC flash manufacturing PMI for September, which is expected to come in at 50.0.

Key quotes

"The August flash was a big downside surprise and looked consistent with the near standstill, 0.2% MoM SA industrial production growth in August."

"We think some of the August weakness was due to the tightening of monetary conditions from mid-June through July."

"The roughly 50bp increase in money market rates was reversed in August. We believe last week’s reported 500 billion yuan SLF injection into the five biggest banks and the 14-day repo rate cut were to prevent a repeat of the July increase in money market interest rates ahead of the seasonal liquidity squeeze for the National Day Golden Week Holiday (October 1-7)."

"We think the improved liquidity situation in August imparts upside risk to the consensus forecast for the HSBC flash manufacturing PMI."

"Our baseline scenario and the big call for China is that, despite the intensification of the housing correction in August indicated by the 70-cities home price indexes, the preponderance of property markets resemble Wenzhou more than Handan."

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