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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
- Since the start of the year, we have seen that a range of financial and economic indicators have been pricing in a significant deceleration in the global economic activity in H2 2022 / early 2023.
- In addition to the Ukraine war shock, China severe lockdowns and the sharp contraction in liquidity in 2021 have been among the major factors behind the global economic slowdown.
- For instance, the top chart shows that China ‘liquidity’ has strongly led global manufacturing PMI (‘proxy’ for global growth) by 9 months in the past cycle and has been pricing in a significant slowdown since the end of last year.
- Interestingly, the bottom chart below shows that China manufacturing PMI, which has been falling sharply in the past few months as strict lockdown policies have been challenging growth outlook, has strongly led US manufacturing PMI by 6 months.
- China PMI fell to 47.40 in April, its lowest level since February 2020, leading to significant downward revisions in growth expectations from analysts (4% seems more ‘reasonable’ now than 5%-5.5% growth target).
- Hence, US growth expectations are also expected to be reviewed to the downside in the coming months, therefore demand for ‘safe haven’ USD should continue to remain strong in the near to medium term.
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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