Daily FNArena News - International

Standard Chartered met with clients in Asia and came away with clues on how investors in the region view the outlook for Fed action and the outlook for markets and economies in the region.

Chinese authorities appear to be moving towards a combination of monetary and currency appreciation to deal with inflation, which suggests a slower rate of currency appreciation.

Stronger oil prices should be hurting Asia given its high level of imports but according to DBS it is demand growth through the region that is allowing growth to remain strong.

Chinese manufacturers are indicating their operational circumstances are improving fast while inflationary pressures are subsiding.

Evidence suggests economic de-coupling between Asia and the West is well and truly underway but GaveKal suggests it will need falling food prices for financial markets to also de-couple.

It is generally considered China has an almost endless supply of rural workers willing to move to the cities but a recent academic study suggests this is not the case.

As expected bad weather conditions have impacted on CLSA’s monthly China Purchasing Managers’ Index.

Even allowing for the impact of recent bad weather DBS Group notes inflationary pressures are becoming the biggest threat for Chinese policy makers, so no change to tighter monetary policy is expected.

The Bank of Finland is forecasting Chinese growth will ease to 10% this year and 9% by the end of the decade, with inflationary pressures a major threat to the outlook in its view.

Somewhere in the world there’s at least another US$300bn in subprime losses we don’t know about yet.