China's industrial profit growth dropped to 6.3% in June
Blame it on high base effect.
According to BBVA Research, China's industrial profit growth declined to 6.3% y/y from 15.5% y/y in May, resulting in first half growth of 11.1% y/y.
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The decline in June was partially due to a higher base effect last year, but was also dragged down by weakness in the coal mining, petroleum & natural gas acquisition and non-ferrous metals mining/smelting sectors. The modest industrial profit growth outturn and disappointing July HSBC Flash PMI reading (47.7) reinforce worries over an economic slowdown. We await the official manufacturing PMI outturn on Thursday (BBVA: 50.0; consensus: 49.8).