Fear of RMB devaluation and Fed hawkish outlook on interest rates is accelerating RMB outflow from China. China markets have been weak despite recent good economic data especially the PPI that has turned positives for the past 3 months. PPI inflation accelerated from 1.2% in Oct to 3.3% YoY. The turned of the PPI is positives because it is an early sign that the Chinese economy is turning around. However the monetary tightening environment is putting a bearish tone on the Chinese market.
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