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1 Apr 2016
China data: what is the market looking for? - TDS
In respect of todays key data from China, analysts at TD Securities explained that the market does expect a bounce in the official manufacturing PMI to (a still contractionary) 49.4 for March.
Key Quotes:
"Finally, we’ll also get the Caixin read for March which is expected to bounce to 48.3, lower than the official read and indicating a deeper degree of contraction.
This is likely due to the fact that the companies surveyed in the non-government PMI have less of a heavy SOE weighting, and thus may find access to credit more difficult, not to mention that these companies may also be more exposed to global demand conditions than the larger SOEs.
Net-net, a lack of bounce in the PMI would be concerning for us, though the underlying details are not expected to improve significantly. As usual, the devil will be in the details."
Key Quotes:
"Finally, we’ll also get the Caixin read for March which is expected to bounce to 48.3, lower than the official read and indicating a deeper degree of contraction.
This is likely due to the fact that the companies surveyed in the non-government PMI have less of a heavy SOE weighting, and thus may find access to credit more difficult, not to mention that these companies may also be more exposed to global demand conditions than the larger SOEs.
Net-net, a lack of bounce in the PMI would be concerning for us, though the underlying details are not expected to improve significantly. As usual, the devil will be in the details."