Tag: China
May
China trip notes part 3 – Growth is not enough
Social matters, such as corruption, income inequality, heavy social burden and pollution, should not be neglected, as they pose serious risks in terms of China being able to shift to a balanced and sustainable economic growth model. Unfortunately, no easy solution exist.
China trip notes part 2 – The rise of consumers
The consumption boom has just started and is set to continue for many years. However, rising youth unemployment may pose downside risks to the scenario of a consumption-driven economy. The future is continually bright for manufacturing workers, especially those who returned to the west.
April
China trip notes part 1 – Growth is going west
I just returned from a two-week trip to China. In my trip notes I will share some of my most interesting findings and impressions. This is the first part of the notes and here I argue that investment-driven growth miracles will continue in west China.
China: Q2 opens on a weak note
The preliminary HSBC/Markit manufacturing PMI for China was a disappointment, falling from 51.6 to 50.5 in April. This does not change our expectations of a gradually recovering Chinese economy, but is a sign of China adapting to a lower growth environment.
Chinese growth disappoints in Q1
China’s sluggish Q1 GDP growth weakens expectations that the global recovery had gained strength at the beginning of the year. Nevertheless, credit growth picked up steam in March, which raises expectations of accelerating growth in Q2.
China housing bubble: no reason to be worried
We have long argued that the Chinese housing sector differs from area to area and imbalances should be assessed on a regional basis. In this report we analyse the development of housing prices, construction activities, transaction volumes and inventory build-ups in the tier one, two and three cities separately.
March
Maths in China: 1 + 1 > 2
In a long time, the Chinese GDP figures were merely a laughingstock for economists around the globe. The key to change the culture of over-reporting lies in Beijing. We believe that the new administration has promoted for other criteria than simply growth. A new normal seems to have emerged.
Nordea WebTV: Chinese growth back on track
We have an optimistic view on Chinese growth prospects and are expecting GDP-growth aroung 8% both this year and next year. Risks related to the housing market and to the local governments funding problem though remain.
The voice of ordinary Chinese
Language barrier and information restriction make it difficult for the outside world to get a true picture of what ordinary Chinese think and want. Here we present the results of China's largest opinion poll, released today, where 85,000 random persons responded. A number of topics are touched on and provides an excellent overview of what ordinary Chinese care about in 2013.
China’s 12th People’s Congress: the key word is people
Premier Wen Jiabao’s speech at People’s Congress opening today was lengthy and offered little news that could shake the markets to the core. Nonetheless, it was positive to confirm that the future economic policies will increasingly emphasise on improving the livelihood of ordinary people. New president and premier will inaugurated between 13 and 16 March.
Metals Weekly: Speed adjustment
The sell-off in metals on the London Metals Exchange (LME) continued last week sending several base metals into “over-sold” territory on certain technical indicators. A confluence of factors have contributed to the recent correction in our view. Growth expectations have …
No smooth sailing in Chinese recovery
The Chinese industrial sector has cooled down in February. It did not come as a surprise to us, as we have always believed in an uneven recovery path, where the export sector remains as a key risk factor. We continue to see the Chinese economy ticking upwards in the coming months.
February
Metals Weekly: The Dragon woke up grumpy
Metals were sent to the slaughter last week as the LME index shed 5.5% to erase all gains year-to-date. The return of the Chinese to the marketplace resulted in a sudden turn of risk sentiment across the commodities space, especially …
Shipping Essentials Weekly
Macro and Events in Brief Focus shifted back to Europe last week as markets realised political risk in the Euro-zone has not disappeared despite a substantial easing in financial market tensions. ECB president Mario Draghi also managed the impressive task …
Metals Weekly: Hibernation mode until the Dragon wakes up
Trading in base metals markets may move into hibernation mode this week as China celebrates the new year of the Snake. The LME index closed 4.35% higher year-to-date on Friday, a whisker below its 10-month high reached earlier in the …
January
Metals Weekly: Strong Chinese raw materials appetite in December
Weekly comment: Strong Chinese raw materials appetite in December Sentiment continues to ebb and flow in the base metals markets. The LME index ended last week marginally lower, as aluminium underperformed and nickel over-performed the rest of the major base …
Stronger Q4 GDP suggests turning point for China
The Chinese economy expanded by 7.9% y/y in the fourth quarter and the full-year growth for 2012 became 7.8%, thanks to public infrastructure investments and rebound in the house market. We expect the recovery to continue in 2013 with a full-year growth rate of 8.1%. We do not believe the PBoC will cut interest rates in 2013. The CNY will be kept as a potential tool to help exporters.
Macro Strategy – Watch Chinese GDP and US consumer confidence
We enter these data points being long risk. A trough in China could spur our commodity strategy as well as risk on trades in FX. In terms of US consumer confidence data we have seen that confidence has sharply deviated from actual spending, a re-bound in the consumer data would certainly be great news going forward. As a strategy we continue to see more selling pressure in US rates compared to EU.
Fresh Chinese data shows that the economy gains strength
Fresh Chinese data this morning supported our longstanding view that the Chinese economy is turning towards brighter days. December exports grew by 14%. Off-balance-sheet credit was very high, indicating the overall credit conditions were not as tight as they appear. Generally, we expect the economy to continue recovering thanks to fiscal stimulus.
December
Metals Market Outlook 2013-14
The bottom in base metals prices is most likely behind us for now. A recovery in global manufacturing activity is taking hold, but a few hurdles must be passed. We make minor upward revisions to our price forecast for Al and Cu in 2013, and expect higher average prices across the board in 2013 compared to 2012.
Flash PMI suggests turnaround in China
Continued improving flash PMI once again confirmed that the Chinese economy is turning around. We stick to our stance that a steady recovery will occur during the first half of 2013. The fragile external demand remains a downside risk.
Global Week Ahead – Focus on policy makers
Here is the Global Week Ahead. The publication covers next week’s major numbers and events.
China: PMIs continue upwards
The November PMIs from both the official and private (HSBC/Markit) sources have continued upwards. The readings support our stance that the Chinese economy is bottoming out and a robust recovery is expected during the first half of 2013.
November
Economic Outlook Global – Here comes the sun
UPDATE! Now with link to web presentation. Winter equinox marks the day when the days are shortest—and from then on days become longer. The same can be said of the global economic development. In spite of the growth in 2012 has been slightly weaker than expected we still see economic growth improving. We have lowered our growth forecasts for 2012 and 2013 marginally but upped our 2014 forecasts.
Nordea WebTV: Light in the end of the tunnel for Chinese economy
Chinese economy has reached the bottom and seems to be headed for increased economic growth. Through infrastructure investments the Chinese government has kept the economy going and the GDP growth will probably reach 7,8 % this year. Watch senior analyst Amy Yuan Zhuang comment on the …
Chinese economy gradually gaining momentum
The HSBC/Markit flash PMI continued to rise for the third consecutive month in China. Today’s encouraging news highlights our longstanding stance that the Chinese economy is turning and momentum is gradually starting to build.
No large-scaled policy changes after new Chinese leadership
China’s new leaders were unveiled this morning. As expected, Xi Jinping became the new party chief and head of the 7-person Standing Committee that rules China. The new team of leaders is expected to carry out reforms in a gradual and cautious manner. Read about the potential reforms and why the pace will be slow here.
Kasvutavoite on vain lattia Kiinan kasvulle
Kiinan talouskasvu on hidastunut tänä vuonna arvioitua enemmän. Aiempia vuosia enemmän keskustelua ovat tänä vuonna herättäneet Kiinan viranomaisten kasvutavoitteet, sillä kasvu on ensi kertaa pitkästä aikaa itse asiassa lähestymässä kasvutavoitteita.
Demystifying Chinese politics: a look behind the closed doors
The 18th Communist Party Congress beginning tomorrow is the biggest political event in China in more than a decade. A new generation of political elites arises. Xi Jinping will become head of the nation as expect. Do not anticipate any tangible reform plans to be announced during the Congress. The power transition will have greater impacts on the economy in the longer term.
Global Week Ahead – Focus turns to elections in the US (and in China)
Elections in US and in China will dominate headlines. Central bank meetings at the ECB and the Bank of England. First independent Danish rate hike in almost four years, weak Swedish production numbers and low Norwegian core inflation.
China: October PMIs highlights the economy is at bottom
The Chinese industrial sector is improving which reinforces our longstanding view that the Chinese economy is at bottom. We maintain our expectation of no more cut of interest rates or reserve ratios this year. However, there is still some way to go before a sustainable recovery can be voiced.
October
Global Week Ahead – another week with a moderately optimistic risk sentiment
The ISM and the labour market report will be the last major economic news before the Presidential election on 6 November, and they will therefore attract more attention than usual. Our view on the most important key figures is broadly neutral compared to consensus estimates.
China: Jump in flash PMI adds to improved growth prospects
Improved flash PMI confirmed that the Chinese economy has reached bottom. It is the last economic indicators from China before the once-in-a-decade leadership change in two weeks. The improved data lately will be used by the Chinese government as proof for suc-cessful economic policies and strengthen confidence in the leadership.
Global Week Ahead – Positive bias to key figure surprises
The most important events this week will be the FOMC meeting and the Troika review of Greece. We expect the Riksbank to stay on hold.
Asia FX Outlook: EM Asia became hot again
Asian currencies have generally performed well vs. the USD in the past month benefiting from increased risk appetite in the markets and return of the search for carry behaviour.
China: Weaker growth in Q3 and bottom is reached
The Chinese economy grew by 7.4% y/y and a further slowdown since previous quarter. However, we believe that the Chinese economy has reached bottom. Stabilization will be more visible in the final quarter of the year before a bumpy and uneven recovery to take place during H1 2013.
Temporary improvement in China’s exports, downside pressures remain
China’s exports and imports have showed a modest rebound in September which we see as temporary. Continued uncertain outlook for the global economy will keep weighing on China’s exports in the coming months, and it may be a challenge for China to achieve 10% export growth this year.
EU Heads of State still mostly talking
This week’s key event will be the EU Summit Thursday and Friday although it may not necessarily provide the news about Greece and Spain that the financial markets are waiting for.
China: Taking down growth a notch
We are lowering our Chinese growth forecast to 7.8% for 2012 from 8%. We still believe the economy is currently bottoming out at around 7.5% growth but the comeback is slightly longer in the coming.
Holiday notes from China: No sinking feeling among consumers
During three weeks’ vacation in China visiting relatives and travelling around the country, I discovered that the average consumer did not seem to be affected by the on-going slowdown in the Chinese economy. The recession mood could neither be seen nor heard.
September
China: Weak manufacturing confidence underlines growth worries
The tiny rise in confidence does nothing to change the weak outlook of the Chinese economy, and underlines expectations of a fragile Q3.
Global Week Ahead – Spain is biding its time
This Week Ahead brings fewer important events, but will surely have its moments. While the markets are still digesting the Fed and ECB announcements, Spain is watching the markets and biding its time.
Week ahead: huge event risk creating volatility
QE3 from Fed and Wild Wednesday in the Euro area next week
Webcast: Chinese economy at the bottom
The government-induced slowdown in China as a part of the transition towards a sustainable consumption-driven economy ran into stronger-than-anticipated headwinds in the first half of 2012.
China: Stability, stability and … stability
Here is a presentation of our new Economic Outlook for China - Stability, stability and ... stability
Two steps forward, one step back
Slide fest for the data hungry. Presentations on China, the US and the Euro-area following up on our latest Economic Outlook report.
Asia FX Outlook: Beggar-thy-neighbour policies
The Asian FX outperformance vs. the USD from the past two months may be reversed in the short term, as prospects for the global economy continue uncertain. A weaker currency is more than welcome for the Asian policy makers.
Bleeding industrial sector puts pressure on additional stimuli
The Chinese manufacturing sector continues to suffer. Deteriorating employment situation prompts for an interest rate cut to ease the funding burden faced by struggling manufacturers. Policy makers’ cautious attitude will remain and no quick rebound in the economy is expected.
August
Week ahead: ECB unlikely to live up to expectations
Will the ECB deliver? Hopes are high but expect somewhat of a disappointment as they won't reveal all.
Kiinan investointivetoinen talous
Kiina mielletään perinteisesti vientivetoiseksi taloudeksi, joten voi tulla yllätyksenä huomata, että tosiasiassa Kiina on maailmantalouden ongelmien myötä muuttunut yhä investointiriippuvaisemmaksi. Miten tässä näin on päässyt käymään?
Drop in Flash PMI calls for more stimulus from Beijing
China’s HSBC/Markit Flash PMI dropped to its nine-month low in August, dragged by both output and orders sub-indices. The very weak numbers call for additional stimulus measures from Beijing which we expect to be taken shortly.
Chinese data adds uncertainty to the outlook
Chinese July data this morning surprised on the downside. We see an increased possibility of central bank action within a month, as the National Congress of the Communist Party is approaching and the stability-obsessed officials want to maintain confidence in the leadership.
Week ahead to be dominated by uncertainty
The dust has not yet settled after yesterday’s ECB press conference, where President Draghi dealt a blow to hopes that the central bank will quickly make huge bond purchases to address the Euro-area debt crisis.
Chinese manufacturing remains fragile, leaders pledge more aid
The Chinese manufacturing sector remains fragile as shown in the July PMI numbers. This is fits our view that recovery in the second half of this year will be slow. Though the country's leaders have pledged a focus on growth, measures in terms of investments may cause more problems in the longer term.
July
China Flash: pick up in Flash PMI albeit still fragile industrial sector
China’s HSBC/Markit Flash PMI picked up modestly in July, reaching the highest level since February this year. We maintain our projection that Chinese economy will recover gradually during the second half of the year.
China growth below 8% for the first time in three years
Chinese economy grew by 7.6% in Q2. It was the lowest growth in three year but in-line with expectations. We do not expect to see the economy slow further but rather pick-up steam.
Month ahead: A hot summer no doubt beckons once again
Summertime has more often than not seen plenty of market action in the past few years, and we do not expect this time to be an exception.
June
EM FX Monocle – Into the summer lull
"Life after the storm" was a good title for our May EM FX Monocle – indeed, EM FX volatilities have declined and the currencies started to recover in June.
Weakness on Chinese manufacturing sector continues
The HSBC/Markit PMI continued to fall in June, pointing towards a weak manufacturing sector and economy as a whole in Q2.
FX Comment: Life after Greek elections
The world is still here today! The currency markets reacted positively to the outcome of Greek elections. The 17th of June was "make it or break it" for EUR in many eyes and hence no surprise the EURUSD jumped to 1.2748 on the news.
Asia FX Outlook: Not the best of times
Sentiment took a turn for the worse in May, which was also reflected in a broad range of Asian currencies.
Asia FX Outlook: Not the best of times
Sentiment took a turn for the worse in May, which was also reflected in a broad range of Asian currencies.
Mixed Chinese data
In general, the Chinese dataflow over the weekend was not as weak as one could have feared after the rate cut last week, and even cautiously encouraging if taking into account the new lending data received today.
Week ahead: little risk appetite ahead of the Greek elections
Apart from the continued talks around when Spain will make the official request for aid to its banks, the Greek elections are definitely the main thing to follow.
Growth a priority – rate cut to be followed by other stimulus
We got our rate cut this week - not from the ECB but from the PBoC. Chinese benchmark interest rates were cut by 25bp in a surprise move, sending a strong signal that growth is a priority in China.
Week ahead: the ECB to deliver?
After this week’s heavyweight US economic data, the spotlight is even stronger in the Euro zone again next week.
May
Global economy still expanding despite crisis
An increasingly clear picture is emerging of a US economy that has gained momentum and is slowly heading for a selfsustaining upswing, while Europe seems to be sliding into a deeper crisis than previously anticipated.
Week ahead: US data to disappoint
We expect US economic data to continue to come in on the weak side, putting renewed pressure on risk appetitive and continuing to support the safest assets.
Chinese PMI weakens – points towards further stimulus
The decline in manufacturing confidence supports expectations of further stimulus measures from the Chinese authorities. After a bleak Q2 we thus expect growth to strengthen towards the end of the year.
Emerging Markets FX Monocle – Life after the storm
The storm did come after the calm, as our April issue of the Monocle suggested. It may get worse before it gets better in the coming weeks, but not for long.
Week ahead: Central bank intervention looming?
All eyes remain on anecdotal news on how depositors in Greece and outside the country are reacting to the recent events. In terms of economic data releases, the main focus will be on flash PMIs for May.
China: PBoC cuts reserve requirement rates
The Chinese central bank (PBoC) cut reserve requirements by 50 bp last weekend, thus continuing to ease monetary policy. However, the pace remains slow, and we do not think the PBoC is done yet.
Slowing inflation leaves room for policy easing
Chinese inflation slowed in April in line with expectations. This leaves room for fruther reserve requirement cuts.
Expected slowdown in China’s commodity imports provides little support for pressured markets
The expected slowdown in Chinese commodity imports finally showed up in preliminary April trade data and seems in-line with both our and the market’s expectations.
Chinese trade surplus grows on weak imports
The Chinese trade surplus surprised on the upside, while the weak import figures raise worries regarding domestic demand. We expect growth to remain slow in Q2.
Lots of news to digest next week
Outlook for next week's key figures and events in the US, the euro area, China, Japan, UK, Canada, Switzerland, Australia and New Zealand.
CNY update: Stuck at 6.30 despite stronger fixing
The CNY has in recent days taken advantage of its broadened band, as the fixing has been pushed clearly higher. We still expect a gradually stronger CNY towards the end of the year.
China: Slightly stronger PMIs, but outlook little changed
Both manufacturing sector PMIs - the HSBC/Markit index and the NBS’s official PMI - rose in April. The indices remain, however, at very divergent levels, increasing the uncertainty of the Chinese economic outlook.
April
Asia FX Outlook: Stabilisation – where to next?
After a strengthening early on in the year, many Asian currencies have held steady over the past month or two.
Correction due, but next week’s data to feed the bond rally
Bond markets appear due for a correction, but we expect next week’s events and economic data only to add to the gloomy sentiment.
Emerging Markets FX Monocle – Calm before the storm?
Following the good start of the year, EM currencies did not hold on to the gains. Yet the orderly gradual EM FX decline has not produced much volatility creating the impression of a bomb waiting to explode if only another “black swan” event strikes.
The Fed to offer little ammo to bond bulls
Next week’s calendar looks quite interesting, with the main focus in the US on the 2-day Fed meeting concluding on Wednesday.
Trading band of the CNY widened – increased unertainty ahead
The trading band of the CNY around the USD was widened from +/-0.5% to +/-1.0% around the central parity set by the central bank, which was no huge surprise after recent comments.
Trading band of the CNY widened – increased unertainty ahead
The trading band of the CNY around the USD was widened from +/-0.5% to +/-1.0% around the central parity set by the central bank, which was no huge surprise after recent comments.
China: Growth undershoots expectations in Q1
The Chinese economy grew by 8.1% y/y in Q1 – the weakest in almost three years. The GDP figures thus confirm the already established view of a continued slowdown in the Chinese economy.
New lending soars in China
New lending in China reached CNY 1010bn in March, picking up clearly from January and February. Although this supports expectations of a gradually turning Chinese economy, we continue to expect further reserve requirement cuts this year, as the economic outlook remains fragile.
Impressions from China
Based on impressions from Hong Kong and Shanghai: We expect mostly negative news in the coming months, but the real challenges are in the medium term - in finding Modern Chinese Communism.
March
Impressions from China III – Doing business in China
Traffic in Shanghai and the business climate in China seem to have much in common. If you look before crossing the street – either left-right or for the green light – then bicycles, scooters and cars alike will cross ahead of you, no matter the traffic rules.
Impressions from China II – Swift renminbi internationalisation
Renminbi internationalisation might be relatively swift. Gradually extending the use of CNH to include more capital transactions and promoting local currency invoicing among Chinese companies are likely ways to continue the process.
Global Economy: Times are changing – for a while
The batch of good economic news seems to have run its course, suggesting financial markets might be at a new turning point.
Impressions from China I – Modern Chinese Communism
The economy is slowing, house prices are falling, market-based construction has stalled, and local government debt is a key concern. Yet the real challenges are in the medium term - in modernising China.
Emerging Markets FX Monocle – a lot of news, little action
Risk is mispriced, again. And hence caution is still essential. But unless some of the key risks actually materialise, we are most likely to see Emerging currencies drift stronger over the coming months.
Kiinan investointikupla
Huoli Kiinan investointikuplasta ja sen puhkeamisesta on ollut jatkuva keskustelunaihe. Kiinan viranomaisilla onkin vahva syy jarruttaa investointeja ja siirtää talouden painopistettä kulutukseen. Siirtymä tuskin tapahtuu kuitenkaan kriisinomaisesti.
Base metals markets in limbo – the next leg upwards could be approaching
The next leg upwards for base metals, notably copper and aluminium, could be approaching. Copper and aluminium buyers should therefore be aware and consider hedging their price risks accordingly.
Where is the Chinese commodities imports slowdown?
It is too early to call the end of the commodities boom.
February
Kiina jälleen kääntymässä talouskasvua tukevaksi tekijäksi
Kiinan talouskasvun hidastuminen on seurausta maan keskuspankin tietoisista toimista hidastaa inflaatiota. Inflaation nyt jo maltillistuttua keskuspankki on jälleen alkanut höllentää rahahanoja, mikä hiljalleen tukee talouskasvua. On siten syytä uskoa, että Kiina kääntyy jälleen maailmantalouden kasvua jarruttavasta tekijästä kasvua tukevaksi tekijäksi.
Markets too complacent
Considering the macro risks hanging over the global economy, we argue that markets may be too complacent. We see four downside risks that could materialise this year, undermining global growth and eventually negatively affecting investor confidence and market valuations of risky assets.
Surprise acceleration in Chinese inflation
Contrary to expectations, inflation broke a five-month easing trend in January. Monetary easing still expected, but pushed back.
January
Emerging Markets Outlook 2012
Many interesting and globally important stories in easily digestable format.
Change of Power for the Superpower
Who will replace Hu? When will Wen step down? - Here is what you need to know about the change of leadership.
December
Emerging Markets: Elections Calendar 2012
Presidential election of Putin - Xi Jinping new top China official - Taiwan Strait tensions could increase - New presidents in Mexico and Korea? - The end of Chavez? - One step at a time in Egypt
Outlook 2012 – kill or cure
Another year is over – a new year is beginning, and kill or cure will be the theme for 2012.
Asia FX Outlook
European debt crisis continues to weigh on Asian currencies
November
China commits to move faster towards a market-based exchange rate
In a draft action plan for the G20 meeting, China commits to more currency flexibility.
Slowdown not “made in China”
No hard landing in China. If the situation abroad worsens, the authorities still have enough room to manoeuvre.
October
Emerging Markets – from FX risks to liquidity risks
The key message in our new Emerging Markets FX Outlook is that FX risks are lower, but liquidity risks are higher. We currently see interesting opportunities in CNY, risk of emergency hikes in Hungary and a strong PLN by year-end.
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High Swedish unemployment. 8.4% SA. Increases the probability of a Riksbank rate cut in July.
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#Pankkisääntely suosii rahoitusta talletuksilla seniorivelan sijaan? Kuten Kyproksella nähtiin, tähän sisältyy myös omat ongelmansa…
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http://t.co/r2GR2CtMT6 Põlevkivist Elektri asemel Õli ja muude kütuste tootmine on ehe näide kuidas tõsta Tootlikkust ja Lisandväärtust
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EUssa mahd. 2016-> yli 100t talletukset voi kokea tappioita+ovat paremmassa asemassa kuin seniorivelkojat.Nostaa pankkien rah.kuluja #Basel3
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RT @HansRosling: Fosil fuel still 80% of world energy, solar is < 1% yet EU plan to put high import tariffs on Chinese solar panels http://t.co/411OYvbUDj
