Well, if bad numbers come in (as expected by every hedge fund due to unexpected rate cut), it is factored in and will jump on short covering. If good news comes, it will jump. Moreever, it is primarily Europe which is causing China problems - it looks like spain bailout will take up all the news and folks will ignore even bad pmi numbers. What do ya think ?
The current trough Q baked in as predicted and aggressive liquidity move timed to counter EU overhang. Good news or positive progress that builds near term EU stability and the FXI is fueled to the upside with a double catalyst.
Shoring up the banks in Spain is a manageable fix from a cost standpoint, that will go a long way in restoring order and confidence and buy valuable extra time as well for EU officials as an instant buffer diminishing the impact of a possible Greek exit.