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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA DATA
A reminder that the official China PMIs print for September print tomorrow. The market expects the manufacturing PMI to rise to 50.1 from 49.7 prior (forecast range is 49.8-51.2 from 19 surveyed economists). On the services or non-manufacturing side, the market consensus is 51.6, versus 51.0 prior (forecast range is 50.5-52.8 from 10 surveyed economists).
- On the manufacturing side, the emerging industries PMI has already printed for September. The index rose to 54 from 48.1 in August. The correlation with the official manufacturing PMI is 67% for the past two years, although as the chart below highlights, there is a clear levels difference between the two series.
- By industry, the steel and oil sectors were better in September, but headwinds from housing likely remained and the external backdrop remains uncertain. Infrastructure spending should be supportive though.
- The housing backdrop may also weigh on the services side, as well as related consumer spending. If the non-manufacturing PMI does rise, it would be the first increase since March of this year.
Fig 1: China Official manufacturing PMI & Emerging Industries PMI
Source: MNI-Market News/Bloomberg
- More broadly, the market will be looking for signs of government stimulus efforts gaining traction. No doubt any positive surprises will be welcome from tomorrow's prints.
- This week's better industrial profits data saw some sell-side analysts firm their respective China GDP projections.
- The second chart below overlays the Citi China economic data surprise index against the consensus 2023 China GDP growth forecast. The surprise index is still negative but comfortably off recent lows. Further positive data momentum, should at the least, help prevent a further fall in growth expectations.
Fig 2: Citi China EASI Versus China GDP Consensus Growth Expectations (2023)
Source: Citi/MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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