China: May foreign exchange reserve data preview - ING

Prakash Sakpal, Economist at ING, suggests that China’s reserves data will provide a more direct measure of the extent of confidence-sensitive capital outflows in May.

Key Quotes

“The May foreign reserves data are due tomorrow. After almost two years of falling streak reserves rose for two consecutive months in March and April. The consensus is forecasting a US$19.7bn fall to US$3.2 trillion in May.

Reserves data will provide a more direct measure of the extent of confidence-sensitive capital outflows in May when the People’s Daily authoritative person interview put hard-landing fears back on the table and ushered in risk-off.

The eighth China-US Strategic and Economic Dialogue will be held today and tomorrow in Beijing. Ahead of the dialogue, US Treasury Secretary Lew advised the Chinese authorities to improve their policy communication.”