Wall Street's China Economists Still Haven't Slashed Their GDP Forecasts After All Of The Bad Data

"With the recent weak industrial production growth, the brought-forward property tightening measures, the new leaders’ serious crackdown on government’s luxury consumption, the demand for much tougher stance on environment protection and the worsening situation in Europe, we cut forecast of China’s annual GDP," he wrote.

Furthermore, he notes that the other economists on the street have yet to adjust their forecast for the weaker data.

"Current market consensus of China’s GDP growth is 8.2% and 8.0% for 2013 and 2014 respectively after several rounds of upward revisions since late 2012," he writes. "We believe markets now are a bit too bullish and we expect consensus forecast to be trimmed in coming weeks. We may see relatively strong headwinds for equity and commodity prices."

Lu warns of "possible overreactions" in the markets when those estimates start coming down.

At 9:45 PM ET, China will release its HSBC Flash Manufacturing PMI report, a preliminary reading of manufacturing activity in the world's second largest economy.

This report will be closely watched given the recent weak round of Chinese economic data came in surprisingly below expectations.

Lu expects today's China Flash Manufacturing PMI report to come in at 50.4. This is below the consensus expectation of 50.8.