China's Manufacturing PMI tumbles to 35.7, worse than 2008, amid coronavirus, risk negative

Yohay Elam FXStreet

China's official Manufacturing Purchasing Managers' Index for February tumbled down to 35.7 points, the lowest on record and well beneath 45 expected. Any score below 50 represents contraction. The figure stood at 50 in January. The coronavirus outbreak paralyzed many factories in the Hubei province and beyond.

The Non-Manufacturing PMI also plummeted to a historic low of 29.6. The services sector was projected to remain in expansion territory, at 51 points after 54.1 in January.

Some market analysts suspect that these statistics published by Beijing would be smoothed to limit the scare in stock markets, but the devastating data shows this is not the case.

Equities have recovered late on Friday as Jerome Powell, Chairman of the Federal Reserve, issued an extraordinary statement regarding the virus. He said that the US economy has good fundamentals but the Fed is ready to act in the face of the crisis. His words triggered a late rally in American shares.

These Chinese statistics will likely dampen the mood once again. Caixin's independent PMIs are due out early on Monday.

See Chinese PMIs preview: Coronavirus-related plunge must be deep to push markets lower

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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