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Data out overnight and the lowest reading since 2008 as growth in other key sectors leads to more talk that China faces risk of major slowdown unless they start to ease monetary policy, most likely by cutting interest rates.

Yesterday the PBOC said there was already enough money floating around but would fine tune monetary policy if needed

The output data, combined with weaker readings in retail sales, investment and imports, points to a further loss of momentum as the cooling housing market increasingly drags on other sectors from cement to steel and saps consumer confidence.

A number of analysts believe annual economic growth may be sliding towards 7% in Q3 putting the government’s full-year target of around 7.5% in jeopardy unless it takes more aggressive action.

Expect some knock-down impact on the already beleagured AUD on the Asian open

Reuters has more on the data release here