China's Schrodinger Economy Continues To Contract And Expand At Same Time
It's hard to know what the world wants but for sure those looking for massive stimulus-driving intervention by the PBoC will be sadly disappointed by the better-than-expected data out of China. With HSBC's China Flash Manufacturing PMI printing with a ninth month of contraction, at a five-month high, but with the Manufacturing Output index at a nine-month high, it would appear that goal-seeked Goldilocks struck again in the soft-landing being engineered across the Pacific. Converging up towards China's 'real' PMI data at the magic 50-mark, HSBC's Asia Economist suggests (via Markit) that "the earlier easing measures are starting to work." With input and output prices slowing, does this disinflationary move provide more room for easing - given that the headline PMI (which implies slowing demand) is still contractionary (as are critical segments like New Orders and Employment). Market reaction is flatline for now with AUD (and implicitly ES) managing a small bump that has now been retraced.
China Flash Manufacturing PMI Summary
and Production at 9 month highs, New orders still contracting, and Employment contracting at Q1 2009 levels...
If they build it - will anyone come?
Source: Markit Economics