China PMI Rises But Misses Expectations For Fifth Month In A Row As Uncertainty Prevails

Tyler Durden's picture

China's Manufacturing PMI missed expectations, coming in at 50.6 relative to a slightly expansionary 50.8 expectation, and up down from the 50.2 prior. This is the fifth month in a row of missed expectations but it has now risen for three months in a row, to the highest level in 8 months; but has now hovered within 0.6pts of the expansion/contraction knife-edge for six months. The NBS's index remains above (more positive) than the HSBC version for the 20th month in the last 21 (which remains in the contractionary sub-50 range it has been in for 16 months). With the Shanghai Composite testing Jan 09 lows and the ongoing Reverse Repo delicate bank pumpathon, the relative stabilization in Services and Manufacturing PMIs is confirmed by this evening's data and provides hope for those bidding H-Shares to 16-month highs. Interestingly for all those who remain shocked at the divergence between the Hang-Seng and the Shanghai Composite, it seems clear that A-Shares investors remain skeptical of the PMI-based stabilization of macro and prefer to trust the weaker (and harder to tweak) Industrial Output data.

Employment and Input Prices sub-indices fell. New Orders rose modestly but it seems like this month's pickup was as much about picking up the slack from last month's backlog than new business.

 

5 months in a row of missed expectations - but 3 months of expansion...

 

but remains above the HSBC index...

 

SHCOMP vs Industrial Production vs Hang Seng

 

Charts: Bloomberg

 

Thought for the night... YUM vs SHCOMP...