China Flash PMI sags, dollar flogged

Discomfort is brewing to our north. China’s Flash PMI for June is out and looks a bit sick at 48.3, down 0.9 points from May. Output fell sharply, as did new orders at home and abroad:

This report is weak without being dire but combined with the ongoing credit crunch they’ve got going up there, China is becoming an increasing worry.

HSBC slashed its growth forecasts a well :

• Beijing’s new leaders prefer to use reforms rather than stimulus to sustain growth.
• While reforms can boost long-term growth prospects, they will have a limited impact in the short term$
• We cut our GDP forecasts to 7.4% (from 8.2%) for this year and 2014 (from 8.4%). Growth should rebound in 2015slower growth

The dollar got smashed straight to 92.4 cents but has rebounded to 92.6. Both reports below.

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130620 China – Faster Reform, Slower Growth by David Smith