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China: Possible 6.5-7.0% growth target for 2016 - Nomura

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 8, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Research Team at Nomura, notes that according to the latest news from the Chinese government, the growth target for 2016 is set at 6.5-7.0% (unconfirmed).

    Key Quotes

    “Such a target is consistent with our view. However, we still believe such a target is too challenging and more aggressive easing is required to reach the target. At this stage, because of strong headwinds and the lack of clarity on how the government will stimulate the economy, we maintain our forecast that real GDP growth will slow to 5.8% in 2016 from 6.9% in 2015. We recognise that the risks to our forecast are skewed to the upside, as the government may implement stronger-than-expected easing measures to ensure that economic growth reaches the stated target.

    However, the Fed’s emphasis on data dependency means Yellen will most likely stop short of taking additional rate hikes off the table in the near term, even though the markets are now pricing only about a 50% probability of a rate increase this year. Unless there is an outsized and unwarranted reaction in financial markets to Yellen’s testimony on Wednesday, Thursday’s appearance should be a nonevent.”
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