Further Improvement Expected From Tomorrow's PMI Prints

A reminder that tomorrow delivers the official PMI prints for Feb, along with the Caixin manufacturing PMI. The market consensus if for improvement across all 3 prints.

• The consensus for the official manufacturing PMI is at 50.6 (range is 50.1-53.0), with the prior at 50.1. The non-manufacturing PMI is forecast at 54.9 (range 53.0-56.0), prior was at 54.4. The Caixin manufacturing PMI is forecast to move back into expansion territory, 50.7 (range is 49.5-52.0), prior was 49.2.
• The prints will help the market form the near-term outlook. Mobility indicators were particularly firm through February, which could benefit the services related PMI, although it is already at elevated levels.
• The chart below plots the services China PMI against the Standard Chartered China SME survey. This measure moved back into expansion territory in Feb, although the rate of improvement has been outpaced by the official measures.
• The services wedge over manufacturing is expected to be maintained. For the manufacturing PMI the weaker external backdrop (judging by weaker trends of South Korea exports to China) may be a factor.
• Better outcomes tomorrow may give the market greater confidence around the China re-opening theme, which has wavered through February and vice versa for weaker than expected outcomes. Of course, tomorrow's outcomes could also be overshadowed by the upcoming People's Congress.

Fig 1: China Non-Manufacturing PMI & Standard Chartered SME China Index

Source: Standard Chartered/MNI - Market News/Bloomberg