Across the Reuters newswires is a report that two large banks have come to the same conclusion about the Chinese economy; the recovery is ongoing but is starting to lose momentum. Economists at Credit Suisse and Merrill Lynch both say that we should watch the Purchasing Managers Index very closely in coming months to see if it slips below the watershed 50 mark. This would suggest that the Chinese manufacturing sector was contracting.
The currency market is currently too busy with major flows to worry about fundamentals too much. Once all this market business is out of the way and we start to focus on fundamentals again, reports like this will greatly influence how the market trends.
