Chinese PMIs Confirm Factory Slowdown

The pace of activity in Chinese factories slowed in August, the release of a pair of official purchasing managers’ indexes (PMI) on Monday confirmed.

The official (PMI) came in at 51.1 in August, according to the National Bureau of Statistics, a tad below expectations for a reading of 51.2 and down from a 27-month high of 51.7 in July. It remains above the 50-mark which separates expansion from contraction.

The final reading of HSBC’s flash manufacturing PMI for August meanwhile fell to a three-month low of 50.2, a dip from the flash reading of 50.3.

There was little reaction in Asian stock markets outside of Australia. Sydney shares widened their gains to 0.5 percent, hitting a more than one-week high, while the Australian dollar barely moved.
The PMI figures follow a slew of disappointing economic data – from manufacturing to credit growth – over the past month despite a burst of government stimulus measures to support the economy.

“The industrial sector is suffering from a drop in new lending, which is making it more difficult to operate and invest. The [PMI] data highlights renewed downward pressure on the Chinese economy emerging in the summer, but it also should prompt more policy easing measures from Beijing,” said Darius Kowalczyk, senior economist and strategist at Credit Agricole.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza