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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA
- Economic data showed a modest ‘pick up’ in the economic activity in May with PMIs data rebounding towards the 50-line threshold and industrial production bouncing back into the positive territory overnight (+0.7% YoY, up from -2.9% the previous month).
- However, China apparent oil demand, which some analysts consider as a leading indicator of the business activity, continued to drop in May, down 8.7% YoY, therefore pricing in further economic weakness in the near term.
- The chart below shows that a plunge in apparent oil demand (YoY) has generally been associated with a sharp contraction in China manufacturing PMI.
- The fall in oil demand coincides with other alternative measures of China economic activity such as the Li Keqiang index or China 10Y bond yield.
- Most of sell-side institutions have capitulated on China officials 5.5% growth target for 2022 and have been constantly reviewing growth expectations to the downside.
- We previously saw that China ‘realistic’ GDP growth is currently closer to 2%-2.5% than the 4.8% reported in Q1; hence, the 5.5% growth target is clearly ‘unrealistic’.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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