It’s the May day holiday in China today but there will still be an important economic data point release:
Due at 0100GMT
- April China manufacturing PMI – expected is 50.5, prior was 50.3
Note that the preliminary (‘flash’) PMI survey by HSBC/Markit Economics showed that factory sector activity ticked up in April but still shrank for a fourth straight month (to 48.3 from 48.0 prior)
–
- median forecast of 12 economists expected China’s official manufacturing purchasing managers’ index (PMI) to creep up to 50.5 from March’s 50.3. That would match January’s level and get further above the 50 line that separates expanding activity from a contraction
- “The government is trying to stabilize growth by introducing targeted easing, but I think it’s not enough and further slowdown is possible,” said Minggao Shen, China economist at Citigroup in Hong Kong
- government has hastened construction of railways and affordable housing and cut taxes for small firms in a bid to underpin growth, while the central bank has cut its required reserve ratios for rural banks
- Beijing’s efforts to tackle factory overcapacity and pollution have hit output, alongside an anti-corruption campaign that has hurt consumption, even amid a push to offset these effects by cutting red tape and opening state-dominated sectors to private investors.
- Latest Reuters poll found respondents believed economic growth could slow to 7.3 percent in the second quarter from 7.4 percent in the previous three months.
- The economy is expected to grow 7.3 percent in 2014 – the weakest showing in 24 years and down from 7.7 percent last year.
- Respondents also expected the central bank to cut the amount of deposits that banks must hold as reserves by 50 basis points in the third quarter.
