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23 May 2014
Reflation in China - BTMU
FXStreet (Guatemala) - FX Strategists at the Bank of Tokyo Mitsubishi UFJ said that the May flash HSBC/Markit manufacturing PMI signalled reflation in China.
Key Quotes
"No doubt in our mind that the May flash HSBC/Markit manufacturing PMI signalled reflation in China but the exchange rate is only barely trading according to economics these days. It’s still really what authorities want and they’re not being particularly communicative."
"We have, nonetheless, put in a slightly lower bottom bound if the economic turnaround becomes more anticipated. The slightly lower upper bound is about exporter selling in a month when the flash PMI showed the strongest new export order reading in 3½ years. Fixings remain key and so far we have not seen the degree of stabilization in May consistent with our spot forecasts."
Key Quotes
"No doubt in our mind that the May flash HSBC/Markit manufacturing PMI signalled reflation in China but the exchange rate is only barely trading according to economics these days. It’s still really what authorities want and they’re not being particularly communicative."
"We have, nonetheless, put in a slightly lower bottom bound if the economic turnaround becomes more anticipated. The slightly lower upper bound is about exporter selling in a month when the flash PMI showed the strongest new export order reading in 3½ years. Fixings remain key and so far we have not seen the degree of stabilization in May consistent with our spot forecasts."