Chinese PMI proves the trade war is hurting the Chinese economy
|- The Chinese economy is suffering from trade wars, according to data released today.
- Chinese PMI's tumble back into contraction territory.
The Chinese economy is suffering, especially in the manufacturing sector, as seen today with the release of Chinese PMIs, (leaked early). China’s manufacturing purchasing manager index (PMI) dropped to 49.4 versus 49.9 forecasts and below the 50.1 prior while non-manufacturing PMI fell below the 53.5 market consensus to match 54.3 prior.
In the detail, where most alarm bells are sounding off, New Orders are back into contraction territories as export orders drop out of sight. also, inventories are on the rise and output growth is slowing. Employment also slipped and small enterprices, the back bone to the economy, are suffering.
This data is about as low as it has been in a decade and considering today's escalation of global trade tensions, thus growth concerns, it does not bode well for risk in general. Such FX pairs as yen crosses and commodity currencies will likely remain under pressure again and the recently renewed optimistic expectations for the Chinese economy have just been checked.
- At the time of writing, USD/JPY's low for the session is at 109.22 while the Aussie made a low of 0.6900.
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