The biggest risk to the US and global economy in 2015 remains the appreciating US dollar, especially as its recent surge has taken the Yuan up with it

The biggest risk to the US and global economy in 2015 remains the appreciating US dollar, especially as its recent surge has taken the Yuan up with it. Accordingly, it appears that the Chinese economy is experiencing a much sharper slowdown than expected with the pace of industrial production down to +6.8% y/y (+8% at end-2014), fixed asset investment moderating to +13.9%y/y (+16%) and retail sales slowing to +10.7% y/y (+12%). These data points point to the sharpest growth slowdown since the global financial crisis in 2009 and suggest that China's economic momentum is considerably weaker than suggested by its recent PMIs. It now seems likely that Chinese growth could slip below +7% in the March quarter at a time when the country is struggling with a large and expanding debt load and the rising threat of deflation. Consequently, the message to the Chinese authorities is very clear - you need to inject a more aggressive policy easing into the system or risk a more worrying slide in the pace of economic growth. Read more: (VIEW LINK)