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  1. #1
    Junior Member

    China tight manufacturing, interest rates drag Copper down !!!

    Rise in interbank rates in Chinese markets to 12% gives out the impression that China is hitting on momentum brakes and provides for assumptions that the economy there is undergoing a deliberate slow down.

    MUMBAI: With Chinese manufacturing shrinking at enhanced speed this month as reflected in HSBC-Markit PMI readings, questions are raised on the future prospects of copper.

    The PMI reading came at 48.3 well below the 50 mark that separates expansion from contraction; of course, below-50 readings are indicative of contraction in the economy.

    This, coupled with rise in interbank rates in Chinese markets to 12% gives out the impression that China is hitting on momentum brakes and provides for assumptions that the economy there is undergoing a deliberate slow down.

    The rates climbed as the central bank of China “refrained from using reverse-repurchase agreements to inject cash into the financial system,” as per Bloomberg.

    “If market rates remain at such high levels, the only scenario for the Chinese economy is a hard landing,” said Xu Gao, chief economist with Everbright Securities Co. in Beijing to Bloomberg.

    “That possibility is growing now -- it seems the leadership is deliberately taking a wait-and-see stance to see how low China growth can be,” he noted.

    Read more: tradingtipsexpert.wordpress.com

  2. #2
    Senior Member LeeChang's Avatar
    Quote Originally Posted by harreymartin View Post
    Rise in interbank rates in Chinese markets to 12% gives out the impression that China is hitting on momentum brakes and provides for assumptions that the economy there is undergoing a deliberate slow down.

    MUMBAI: With Chinese manufacturing shrinking at enhanced speed this month as reflected in HSBC-Markit PMI readings, questions are raised on the future prospects of copper.

    The PMI reading came at 48.3 well below the 50 mark that separates expansion from contraction; of course, below-50 readings are indicative of contraction in the economy.

    This, coupled with rise in interbank rates in Chinese markets to 12% gives out the impression that China is hitting on momentum brakes and provides for assumptions that the economy there is undergoing a deliberate slow down.

    The rates climbed as the central bank of China “refrained from using reverse-repurchase agreements to inject cash into the financial system,” as per Bloomberg.

    “If market rates remain at such high levels, the only scenario for the Chinese economy is a hard landing,” said Xu Gao, chief economist with Everbright Securities Co. in Beijing to Bloomberg.

    “That possibility is growing now -- it seems the leadership is deliberately taking a wait-and-see stance to see how low China growth can be,” he noted.

    Read more: tradingtipsexpert.wordpress.com
    Chinese manufacturing is really shrinking fast and it place in doubt the growth in entire South East Asia, because it depends intimately on the Chinese economy health and growth. If we have strong decline in the China growth we will see for sure decline in some other countries like South Korea, Singapore and Indonesia. The Japanese economy probably won’t be influenced at that level, firstly because of the stimulus program they have and second because their production goes directly for Europe and America, but the Japanese manufacturing is moved mainly to China and this could be some kind of thread.

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