Nomura note that "China's Emerging............>

CHINA: Nomura note that "China's Emerging Industries PMI (EPMI), which gauges

sequential growth momentum in the country's high-tech industries, is closely

correlated with the official manufacturing PMI. It fell by 1.3pp to 54.0 in

April from 55.3 in March, dragged mainly by the new orders (-1.6pp to 56.9) and

employment (-3.6pp to 45.9) sub-indices. The new export order sub-index dropped

markedly to 32.6 in April from 44.6 in March, increasing our conviction in our

view of collapsing external demand due to the global pandemic. Furthermore, the

employment sub-index fell to 45.9 in April from 49.5 in March, pointing to

rising layoffs. The EPMI is not seasonally adjusted, its April print of 54.0 was

much weaker than its 2015-2019 April average of 61.6. By adjusting for

seasonality and factoring in slumping external demand, we expect the official

manufacturing PMI to ease to 50.5 in April from 52.0 in March. We believe the

drop in external demand could weigh significantly on exports and employment in

April."