Futures Exhibit Peculiar Ungreen Color On 5th Consecutive Month Of Chinese PMI Contraction
Moments ago the Chinese PMI as tracked by HSBC/Market (not to be confused with the other PMI, tracked by China itself, which will likely show expansion, like last month), came and printed at 48.1, down from 49.6, and representing a 5th consecutive monthly contraction for the Chinese economy. Whether this means that China will promptly unleash more easing, or will simply wait to import some of Bernanke's own QEasy cooking, remains to be seen. What is far more shocking is that futures are indicating some very odd, ungreen color. It is on the tip of our tongue, but we can't quite place it... We are trying to think back to the last time futures were bathed in this particular shade of non-green, and can't - after all it was banned by the Chairsatan himself. We can only assume that the algos responsible for ramping the futures up are currently on their oil change break.
And from Reuters:
China's manufacturing sector activity shrank in March for a fifth successive month, with the overall rate of contraction accelerating and new orders sinking to a four-month low, the HSBC flash purchasing managers index showed on Thursday.
The PMI, the earliest indicator of China's industrial activity, fell back from February's four month high, slipping to 48.1, within a whisker of the level that economists at HSBC consider a crucial level dividing decline from growth.
Slowing activity could mean a further relaxation of monetary policy to help underpin growth in the world's second biggest economy, but lingering inflation risks uncovered by the survey highlight the dilemma facing China's policymakers who are determined to keep a lid on prices.
The PMI reading, down from February's 49.6, is likely to reinforce the more bearish views on China's economic trajectory.
"Growth momentum could slow down further amid a combination of sluggish export new orders and softening domestic demand. This calls for further easing steps from the Beijing authorities," HSBC chief China economist, Qu Hongbin, said in a statement.