Official M'fing PMI Contracts, Energy-Intensive Sectors Weigh

China's official manufacturing PMI moved into contractionary territory for the first time since the COVID driven Feb '20 contraction, printing at 49.6 vs. the BBG median of 50.0 and August's 50.1 print. The production sub-index printed below the neutral 50.0 zone, while the orders metrics provided relatively steady levels of contraction when compared to the August reading. Input and output rises expanded at greater rates vs. August, while the employment sub-index remained in contractionary territory, familiar themes there.

• The NBS noted that the contraction in the headline print was driven by a slowdown in energy-intensive sectors, which isn't a surprise given the well-documented and previously outlined headwinds for energy consumption owing to limitations being imposed by policymakers.
• The official non-manufacturing PMI release saw a surprise move back into expansionary territory, hitting 53.2 vs. the BBG median of 49.8 and August's 47.5 print. It would seem that the expansionary survey reading was driven by the price metrics and business expectations.