China’s official manufacturing purchasing managers index (PMI), the bellwether of large industrial firms, remained unchanged at 50.2 in June.
In the meantime, HSBC China flash PMI edged up to 49.6 in June from 49.2 in the prior month.
"Real activity indicators remained sluggish in April and May, and the electricity generation dropped again in early June, pointing to a soft print of the second quarter GDP growth," according to a research report by ANZ.
The bank also forecasts that the People’s Bank of China will further lower interest rates by 25 basis points in the third quarter, and cut reserve requirement ratio (RRR) by additional 100 basis points in the second half of this year, with one 50 basis points cut in the third and fourth quarter respectively.
