China: Surprise increase in Caixin manufacturing PMI - TDS

Analysts at TD Securities point out that China’s November Caixin manufacturing PMI rose to 50.2, against the market consensus figure of 50.1 and from its previous reading of 50.1 in October.

Key Quotes

“The surprise increase, albeit a marginal one, follows a bigger than expected drop in official manufacturing PMI, which fell to 50, its lowest since July 2016. The index has slid over recent months as the exports outlook has darkened.”

“The Caixin PMI is more heavily skewed towards smaller and export orientated companies and its increase may reflect 1) its sharper fall over recent months and 2) some expectation of a trade deal at the G20 summit.”

“The impact on CNY/CNH is likely to be positive, with both likely benefiting from the Trump/Xi truce and loss of USD momentum in the near term.”

“But enjoy the rallies today – because they won’t last.”