China official PMI signals soft growth momentum – Nomura

FXStreet (Barcelona) - The Research Team at Nomura note that China’s official PMI registered its lowest reading since July 2013, falling to 50.1, signalling a weak growth momentum.

Key Quotes

“The official PMI fell for a third consecutive month to 50.1 in December – its lowest reading since July 2013 – from 50.3 in November (Consensus and Nomura: 50.0).“

“The decline was led by new orders and output sub-indexes.“

“The price measures show very strong disinflationary forces, signalling deepening PPI deflation and further declines in CPI inflation in coming months.”

“With no inflation pressure, we expect more policy easing in Q1 2015, including a 50bp cut of the bank reserve requirement ratio, to shore up domestic demand.”

“We maintain our forecast for GDP growth of 7.3% in Q4 2014 before slowing to 7.1% in Q1 2015. “