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21 Feb 2013
Forex Flash: China: The flash MNI indicator jumped in February - Nomura
Nomura Economist Zhiwei Zhang notes that the MNI China flash business sentiment indicator jumped to 61.79 in February from 55.16 in January, its highest level since April 2011.
He comments that production rose to 59.13 from 53.92, while new orders rose to 58.14 from 55.76. Although he believes the data only reflects the first 10 days of February due to the lunar new year holiday, the sharp increase is still informative, since it is the first macro data point available for February. He feels that the strong MNI reading is consistent with the dramatic rise of total social financing to its historical high in January and suggests economic momentum continued to improved strongly, and is evidence of upside risks to our and the consensus forecast for Q1 GDP of 8.2%. He finishes by writing, “If growth in Q1 surprises on the upside, inflation in 2013 should also be higher, which will increase the likelihood of policy tightening following the National People‟s Congress in March.”
He comments that production rose to 59.13 from 53.92, while new orders rose to 58.14 from 55.76. Although he believes the data only reflects the first 10 days of February due to the lunar new year holiday, the sharp increase is still informative, since it is the first macro data point available for February. He feels that the strong MNI reading is consistent with the dramatic rise of total social financing to its historical high in January and suggests economic momentum continued to improved strongly, and is evidence of upside risks to our and the consensus forecast for Q1 GDP of 8.2%. He finishes by writing, “If growth in Q1 surprises on the upside, inflation in 2013 should also be higher, which will increase the likelihood of policy tightening following the National People‟s Congress in March.”