CHINA DATA
Fig 1: China PMIs Both Into Contractionary Territory for October
Source: MNI - Market News/Bloomberg
- The manufacturing PMI headlines remains within recent monthly outcomes, but the non-manufacturing print is back to fresh lows since May of this year. It points to a decent loss of momentum for the services sector, given the headline reading was at 54.7 in June of this year.
- This suggests further downside momentum in consumer spending indicators like retail sales, see the chart below.
- It also comes amid a more elevated backdrop for domestic covid case numbers as well as we head into November, which could inhibit any rebound in the near term.
- The detail of the PMI surveys showed disappointing outcomes for new orders (48.1 for manufacturing, fresh lows back to April, 42.8 for non-manufacturing) and employment also slipping against both survey readings. The only bright spot for the manufacturing PMI was a tick up in export orders to 47.6 (form 47.0).
Fig 2: China Retail Spending - Momentum Could Still Be Skewed To The Downside
Source: MNI - Market News/Bloomberg
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