SMEI returned to expansionary territory at 50.7 in October, after staying below 50 for two months. Overall performance sub-index edged up to 50.2, the first above 50-reading since May. Manufacturing continued to outperform; real estate, construction and retail sales remained key drags. Easing monetary policy supported SME access to bank credit; funding costs from NBFIs fell further, Standard Chartered’s Hunter Chan and Shuang Ding note.
Demand outlook improved
“Our proprietary Small and Medium Enterprise Confidence Index (SMEI; Bloomberg: SCCNSMEI <Index>) edged up to 50.7 in October from 49.7 in September, leaving contractionary territory after two months on a broad-based improvement in the three key sub-indices. The performance sub-index rose to 50.2 in October from 48.9, ending four straight months of contraction. While sales remained subdued, the new orders, employment and profitability sub-indices bounced to above-50 levels. The expectations sub-index recovered to 50.3 from 49.6 prior.”
“While production activity declined m/m partly due to the National Day holidays, the manufacturing performance sub-index picked up on a solid increase in new orders. External demand remained robust. Cross-border trading SMEs reported a recovery in sales and higher new orders. Meanwhile, non-manufacturing performance remained soft, with real estate, construction, retail sales and wholesale, and other services SMEs continuing to report a m/m decline in overall activity.”
“The credit sub-index climbed to a five-month high of 51.7 in October, as banks were more willing to lend to SMEs. The People’s Bank of China (PBoC) lowered its policy rate and reserve requirement ratio (RRR) in late September. In addition, borrowing costs from non-bank financial institutions (NBFIs) fell for a second month. Expectations of CNY appreciation against the USD picked up again among SMEs.”
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 resumes slide below 1.0500
EUR/USD gained modest upward traction ahead of Wall Street's opening but resumed its slide afterwards. The pair is under pressure in the American session and poised to close the week with losses near its weekly low at 1.0452.
GBP/USD nears 1.2600 as the US Dollar regains its poise
Disappointing macroeconomic data releases from the UK put pressure on the British Pound, yet financial markets are all about the US Dollar ahead of the weekly close. Demand for the Greenback increased in the American session, pushing GBP/USD towards 1.2600.
Gold pierces $2,660, upside remains capped
Gold (XAU/USD) puts pressure on daily lows and trades below $2,660 on Friday’s early American session. The US Dollar (USD) reclaims its leadership ahead of the weekly close, helped by rising US Treasury yields.
Broadcom is the newest trillion-dollar company Premium
Broadcom (AVGO) stock surged more than 21% on Friday morning after management estimated on Thursday’s earnings call that the market for customized AI accelerators might reach $90 billion in fiscal year 2027.
Can markets keep conquering record highs?
Equity markets are charging to new record highs, with the S&P 500 up 28% year-to-date and the NASDAQ Composite crossing the key 20,000 mark, up 34% this year. The rally is underpinned by a potent mix of drivers.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.