HSBC China Composite PMI Tumbles To 28-Month Lows As Services Fell (& Rose)

Tyler Durden's picture

For the 4th month in a row, China's composite PMI fell (with new orders tumbling) - this time to the lowest levels since Nov 2011 and firmly in contractionary territory. However, in the exact antithesis of the manufacturing PMI data, tonight's non-manufacturing data saw the official government data miss expectations and drop (manufacturing rose) while HSBC's services PMI rose (HSBC's manufacturing dropped). This was enough (along with an Aussie retail data miss) to send AUDJPY into conniptions jerking lower then higher then lower as the algos just could not comprehend the levels of absurdity that was flooding their valves. Japanese PMI strolled along in its neither here nor there zone and Aussie PMI tumbled back into contraction after one month of exuberance. In the famous words of Frank Valli, oh what a night.


Chinese Services PMI rose (and fell)...


But it was not enough to save the Composite PMI from its lowest level since Nov 2011...


Aussie Retail Sales missed by the most in 9 months...


And that schizophrenia sent AUDJPY mad...



And for all those who were hoping for the massive stimulus to save the world from China... they just fired the world's smallest and most focused bazooka - we suspect the money-hungry will be disappointed (for sure Chinese stocks are at the moment)...

As The BBC reports,

China's government has acted for the first time this year to boost economic growth after a string of disappointing data led to fears of a slowdown.


The government said it will cut taxes on small firms and speed up the construction of railway lines.


The measures had previously been included in China's economic work plan for 2014.


However, they had not before put them together in a package aimed at boosting growth.


"We will find innovative ways including fiscal and financial methods to...steady economic growth," the cabinet said in a statement on the government's website.

After its weekly meeting on Wednesday, the government announced the measures, including an 18% increase in the total number of railway lines being built compared to last year. Most of those tracks will be laid in central and western regions of the country.


To finance the railway investment, the government will sell 150 billion yuan ($24.6bn; £14.5bn) worth of government bonds.


As further stimulus, Chinese authorities said they will also extend tax provisions granted to small businesses into 2016.


"We must roll out policies that spur businesses' vitality, effectively increase demand and boost jobs," the government said.




Chinese Premier Li Keqiang has sought to reassure markets that the government remains prepared to act, and has previously emphasized that creating jobs - as opposed to a specific growth target - was the most important item on his agenda.

$24 billion, financed by selling bonds... not even freshly printed funny money? and funneled to very specific industries as opposed to flooded into the market... that will not do at all.

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alien-IQ's picture

That should guarantee yet another new new new all time high in the US fraud market.

asteroids's picture

Fear not, tomorrow is an ECB day. The market WILL be green.

knukles's picture

Lies, all damned lies.
It's the weather. 
Everywhere but China and there it's pollution.

Global Whateverthefuck, Bitchez


Ummmm Yummie!
Yangtze sun cured sour pork!

wallstreetaposteriori's picture

So what is everyones opinion as too what the best short play there is to capture the immient collapse of china?


Short all the chinese tech ADR's or short LVS....?

FiatFapper's picture

Why do g'ments build railways as a financial magic wand? UK is doing the same with the HS2 line, so the barrow boys can quaff champagne in Manchester at the weekend.

AdvancingTime's picture

This is becoming insane and the speed it unravels is picking up. Every country has unofficial lenders, but in China individuals, companies and even local governments who can not get loans from state-controlled banks have been on a borrowing binge from these unofficial sources. China is awash in overcapacity and debt.

After several years of growing debt loads concern is rising the whole unstable pyramid is about to come crashing down bringing China and possibly the global economy with it. The economic efficiency of credit is beginning to collapse in China and the unwinding of China’s giant credit spree could be vary painful. More on China's credit trap below.

Caviar Emptor's picture

Yes . And since everyone else is awash in debt and overcapacity, there's no where to run , no place to hide. Solution? One more round of globally coordinated monetary expansion

UselessEater's picture

then a grand reset with signifcant ramifcations for nations without gold?

Seer's picture

Que Major Kong dropping out the bomb bay door...

TheRideNeverEnds's picture

Pretty bullish news that; last time we printed such levels the S&P subsequently rallied for another two plus years and a thousand points.  

Bunga Bunga's picture

Tomorrow's headline:


Seer's picture

Unicorns on the horizon!

vyeung's picture

No, there will not be stimulus in the general sense (no more crazy QE). People in the West don't seem to get the idea that china works on a 5/10 year plan. Unlike the US/EU that works on a minute reactionary plan. What were people expecting when they explicitly made the point that they were to adjust the economy to rely less on exports and more towards internal consumption? Sometimes cry wolf is fun, but atleast things need to be put into perspective. The shadow banking is a real problem and they are in the process of fixing it, but it will painful. Expect more negative news, but if you are an investor opportunities will appear.

Seer's picture

Wow, a 5/10 year plan!  Plans fix everything!  Well, apparently not one-minute ones, and if it's not one minute then at what point does it become mature?  Are you sure that it's really not a 6/11 year plan that is the one that works and not 5/10?  Oh, that's right, we have to WAIT around to see; and at the moments of truth 5 years and 10 years) we get "new" 5/10 year plans that "correct" the previously infallable 5/10 year one.

The trick is always to make a promise for tomorrow, never today.  And that tomorrow never comes (other than, perhaps, a small sampling, which creates the illusion of it all happening- an enticement to keep pulling the suckers along.

The native American Indians used to plan for SEVEN GENERATIONS.  How this really would have played out is but a guess, as the "test" was curtailed by the black swan of the arrival of european "explorers,"

The Chinese are human.  No exemption on the hubris front...

It's a finite planet.  ALL BIG plans will eventually fail.  Entropy is a bitch.

Squid Viscous's picture

what was the weather like in China last month... northern hemisphere ...i bet it was cold?