Shanghai sags

Monday, 27 July 2015

The Shanghai coercion rally has hit a wall today down 2.5% after sharp falls Friday as well:

Chinext is similar if better:

I’m not even going to pretend to know where this communist quango is headed next but will note that the two rough days have coincided with bad data. On Friday it was the lousy Caixin Flash PMI and today it’s weak industrial profits which were down -0.3% year on year versus 0.6% last month.

Previously the rally had been driven by bad data and rising liquidity, whether that is now reversing I have no idea!

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.