CNY review

Chinese economic data was again very weak today with industrial production for April lower at 5.9 percent being below economist expectations. Fixed asset investment was lower at 12.0 percent well below 13.5 percent. Retail Sales growth at 10 percent (Y-on-Y) was at the lowest since the financial crisis. 

Chinese economic data has been below par especially over the last few months raising expectations that the Chinese Government could launch another stimulus plan. The Chinese Central Bank cut interest rates for the third time in 6 months earlier this week to loosen monetary policy further. China has also witnessed capital outflows with an official report showing that foreign exchange reserves plummeted by $113 billion in Q1 2015. 

The woes which started with the collapse in the shadow banking crisis and a slowdown in its large real estate sector has become much broader based now.