China’s official manufacturing PMI moderated in July to 51.2 from 51.5 in June, in line with Nomura’s forecasts but slightly below market expectations of 51.3, notes the research team at Nomura.
Key Quotes
“The new order sub-index, which is a good leading indicator, dropped to 52.3 in July from 53.2 in June. Despite monetary easing and the announced fiscal stimulus, we still see strong headwinds and expect the economic growth to weaken further before staging a moderate rebound, so we expect the manufacturing PMI to decline further in coming months.”
“More specifically, we expect infrastructure fixed asset investment growth to recover from its current low over the next couple of months, but export growth to slump in Q3 nevertheless.”
“We remain cautious on calling a growth rebound for the following reasons: 1) the starting and implementation of new projects takes time, especially as local governments still face a credit squeeze; 2) the pledged supplementary lending (PSL) and cash settlement of the shanty town renovation program are not sustainable, in our view; 3) it takes time to unwind some of the previously implemented deleveraging measures; and 4) already high yields of Chinese corporate onshore and offshore high-yield dollar bonds have made bond financing much more difficult for LGFVs and enterprises.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends decline toward 1.0500 after US data
EUR/USD came under renewed bearish pressure and declined toward 1.0500 in the second half of the day on Monday. After the data from the US showed that the ISM Manufacturing PMI came in better than expected in September, the US Dollar extended its rally and weighed on the pair.
GBP/USD falls below 1.2150 as USD rally continues
GBP/USD turned south and retreated to a fresh daily low below 1.2150 in the American session. The US Dollar continued to gather strength against its rivals after the better-than-expected ISM September Manufacturing PMI data and forced the pair to stay on the back foot.
Gold falls to fresh multi-month lows below $1,830
Gold price turned south and dropped to its weakest level since early March below $1,830. The benchmark 10-year US Treasury bond yield gained traction on upbeat US PMI data and was last seen rising nearly 2% on the day above 4.6%, causing XAU/USD to stretch lower.
Week ahead: Fed speech and NFP likely to dictate crypto market moves this week
With the start of 2023’s fourth quarter, things are finally getting interesting in crypto. While the next 12 weeks are extremely important, let’s start by focusing on what to expect this week.
NIO contracts 2% as Tesla delivery decline weighs on EV sector
Nio (NIO) stock dropped 2.3% on Monday morning despite meeting its quarterly delivery target for the third quarter. Tesla's (TSLA) Q3 production and delivery decline is the culprit.