Asian shares skidded on Monday as investors awaited data this week that could provide more evidence of a slowdown in China, while the dollar gave back a little of its recent gains.
China’s flash manufacturing PMI reading on Tuesday could come in below the 50 level, indicating that manufacturing activity is contracting. “The psychological effect of a below-50 reading will be significant and consistent with the slew of softer Chinese data over recent weeks.” Mitul Kotecha, head of FX strategy Asia-Pacific for Barclays in Singapore, said in a note to clients.
China will not dramatically alter its economic policy because of any one economic indicator, Finance Minister Lou Jiwei said on Sunday, in remarks at a meeting of finance ministers and central bank chiefs from the Group of 20 nations who met in the Australian city of Cairns. His remarks came days after many economists lowered growth forecasts having seen the latest set of weak data.
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