According to Prakash Sakpal, Economist at ING, the ongoing trade war with the US has put China’s high-frequency activity data under an intense spotlight.
Key Quotes
“Next week’s data includes industrial profits for July and the manufacturing and non-manufacturing Purchasing Managers Indexes (PMIs) for August.”
“The manufacturing PMI for August will reflect the first full month of the US-China trade war impact. The consensus is centred on our 51.2 forecast, unchanged from July, but the risk is tilted on the downside rather than upside.”
“Consistent with the Chinese stock market sell-off underway since the start of the year, industrial profit growth has slowed to 17.2% year-on-year in the first half of the year from 22% a year ago. This closely tracks the Li Keqiang index (the composite index of year-on-year activity growth, including growth in outstanding bank lending- Premier Li’s preferred gauge of the economy) which shows the slowdown continued in July.”
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