Chinese retail sales and industrial production growth likely to have eased in November

Chinese domestic demand is expected to have eased further in November. According to a DBS Bank research report, retail sales and industrial production growth are expected to have eased to 8.2 percent and 5.5 percent year-on-year, respectively.

This greatly mirrors the continued fall in the official manufacturing PMI. Especially, the new export order component of the official manufacturing PMI shrank for six consecutive months, because of external uncertainties.

Fixed asset investment would have rebounded to 5.9 percent in November, owing to an accommodative monetary policy. Looking ahead, the PBOC is expected to offer more long-term cash through MLF and RRR cuts to cope with deterioration of corporate and local government cash flow.

“Money supply is therefore expected to increase. New increase in total social financing should hold stable. Yet, off-balance sheet products is set to shrink further after falling for 8 months in a row alongside the government’s effort of controlling financial risk”, DBS Bank.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Chinese Yuan was highly bearish at -105.848, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -24.5494. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex