While the growth contraction in China appears to be moderating the economy is not at the end of this process

While the growth contraction in China appears to be moderating the economy is not at the end of this process. Indeed, growth is likely to continue moderating as the Chinese authorities slow credit growth. Chinese Government moves to support growth through infrastructure spending in railways and some modest tax cuts are cushioning the impact, but it is unlikely that there will be more government stimuli or monetary policy easing unless growth moderates more. This additional slowdown is likely, but it won't be enough to spark a policy response. While a Chinese growth moderation three years ago may have sparked a sharp market reaction, in the current market climate improvements in the US and Europe (which combined are nearly four times bigger than China) are keeping investor optimism intact. Full overnight report available here: (VIEW LINK)