China PMI Miss Slams JPY-Carry Trades

Tyler Durden's picture

Thanks to a drop into contractionary territory for both New Export Orders and Employment, HSBC's Flash China Manufacturing PMI missed expectations and dropped to its equal lowest 'expansionary' print in six months. Also struggling with pricing power, as the China industry minister notes the country is "clearly facing over-capacity problems," commodity currencies (and the Shanghai Composite) are getting monkey-hammered. As we noted earlier, China is somewhat hamstrung in its ability to save itself this time, and further to that, the China industry minister added, "companies have no strong desire to invest."


After some 'hope' it appears, just as with GDP, that China is reverting to its expansionary-contractionary self...


but this did not play well with JPY-based carry trades in the commodity currencies...


Shanghai Composite...


Charts: Bloomberg

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Ness.'s picture



Naughty CATtiy.

zorba THE GREEK's picture

The Chink is going down the drink, I think.

Dudeskis's picture

Shame on the both of you.  So wrong....must resist the urge to raugh.

Pareto's picture

yeah but, just for responding to the post - you know- you're already going to hell. he he heeeee

Go Tribe's picture

And metals with it. The depression continues.

smlbizman's picture

maybe those guys just get bored at 3a.m......what else is there to do other than mash silver at that time.....somebody needs to show them midget porn....

FieldingMellish's picture

New Chinese proverb: Sell stawks, buy gold!

thismarketisrigged's picture

dont worry, when we all wake up tomorrow, benny boy will be printing the futures as green as possible.


he can overcome any challange, it does not matter how bad data is.


so, chinas last 2 major data releases, the gdp and now the pmi have been major misses, and factor that in with all the misses in the u.s data, including the housing which all the fools thought was actually recovering, and then all across europe the horrid data, and somehow these markets are not sinking.


dont worry, netflix will make sure the s&p does not fall tomorrow, with its bullshit earnings.

Silverhog's picture

Come on Benny, your drug addicted economy is having delusions and convulsions. Where's the dope.

Go Tribe's picture

Nothing they can't fix with some intangibles.

FieldingMellish's picture

Must be a hundred basis points of GDP in Bruce Lee movies alone!

Go Tribe's picture

Not to mention all the single Chinese chick ads on ZH. Glad Tylers are doing their most to prop up the Chinese economy.

HD's picture

3% GPD out of nowhere at the end of the week.

After the changes in July I assume we will be at 8% GPD just like our good friend China.

Cognitive Dissonance's picture

Around and around the carry trade goes, where she stops everyone knows.

(The fiat abyss in case you missed the Fed memo.)

thismarketisrigged's picture

i am actually thinking to myself, why does this number matter?


the market does not trade on fundementals, it only trades on printing by the fed.


lastnight at this time, s&p futures were up 8 pts and dow was up about 60 on absolutley nothing whatsoever.


tonight with shit data, s&p futres are down a whopping 3 pts, go figure. if it was a beat, we would prob be up 20 s&p points.



akak's picture

Blobbing-down: the new mattering thing.

crawl's picture

Don't fret...Kevin Henry and Co. will save us from those 0.0001% sell offs and shoot the ES higher and higher and higher.

In this new central planned investors market, bad news is good and good news is even better.


Smuckers's picture

Next category will be "Tangibles Unrealized" - or the "iShit we should be buying but didn't".
Gotta be a few hundred billion in there too, once you classify food and gas as frivolous spending.

rosiescenario's picture

....and the next 'Virtual Intangibles'

Bloody Chiclitz's picture

It's like dark matter, it must be out there somewhere so lets count it and loan ourselves some zirp money on it.

cdntrader's picture

YAMEAH !! (Yet, Another Miss, ES Another High !!)

NoWayJose's picture

Companies have no incentive to invest -- my favorite quote from this. Just cut costs and employees, borrow free money, and off shore to Thailand or Vietnam. US has been doing this for 25 years. Now China is no longer 'cheap' compared to other Asian countries (especially land), so Chinese companies do not want to open factories in China - especially with the Chinese government tightening some policies.

Notarocketscientist's picture

Nah.  I do business in China and have done so for a decade.  These other countries are nowhere near taking China business away.  China is not only about cheap trinkets - they are moving quickly into high tech production.

Think iphones will move production to Bangladesh - not in my lifetime.

The reason China is tanking is because of course export markets are tanking.  The EU is China's biggest trading partner (or at least was)

The problem is very simple - people are simply BROKE.

Go Tribe's picture

Same reason every company is reporting softer revenues. People aren't buying - anywhere.

KashNCarry's picture

You're right, and you know what?  Those Chinese companies, and other Asian companies are slated to open new factories in Mexico and Latin America where operating costs are now the least expensive anywhere...

reader2010's picture

China has very extensive Labor Camp system which puts Gutlag to shame. Stay Bullish.

Notarocketscientist's picture

The solution is at hand.  Build more Ghost Towns.  More empty apartment buildings that will NEVER be rented because guess what - most people are still DIRT POOR

Some fucking ignoramus said to me recently 'but but but what about all those millions moving to the cities'

Yep that's happening but these people have no skills..... they make very little money ...... they do NOT have the means to rent an apartment that cost 250k.

Owners will leave them empty rather than accept 50 bucks a month in rent. 


The difference is people are still believing the BS out of here.

buzzsaw99's picture

Bank of China must buy fraud cap stocks to support market.

XRAYD's picture

So, Chinese quantitative Yuaneasing is just round the corner? 

thismarketisrigged's picture

''dont worry, when we all wake up tomorrow, benny boy will be printing the futures as green as possible.''


''he can overcome any challange, it does not matter how bad data is.''





and sure enough, it looks like this is exactly what is happening. bad china data? no problem

css1971's picture

Green in half an hour....

Ok so everyone knows central bank printing is the only thing maintaining the status quo. The ceasing of printing will bankrupt very wealthy, powerful and amoral people with connections.

How do you get a central banker to do the right thing even if they want to, when their lives and the lives of their families are on the line.