Asia: PMIs offer glimmers of hope – TD Securities

Mitul Kotecha, senior emerging markets strategist at TD Securities, notes that Asia's September manufacturing PMIs mostly revealed improvements with only Korea, Singapore, and Philippines registering declines.

Key Quotes

“China's official manufacturing PMI remained in contraction for the fifth straight month. 5 out of 9 Asia PMIs remain in contraction (below 50), a slight improvement from last month due to Taiwan.”

“Taiwan registered the biggest improvement (+2.1) in manufacturing sector confidence after 11 months in contraction. Its economy appears to be increasingly benefiting from incentives to bring manufacturing back home. In contrast Korea's PMI registered the biggest decline (-1), remaining in contraction for a fifth straight month.”

“Our average Asia PMI measure moved higher, but remained in contraction for the fourth straight month, as did the ex-China measure. Our GDP weighted Asia PMI measure edged back above 50.”

“Hopes of progress in US-China trade talks next week have helped to underpin manufacturing sentiment across the region. However, such hopes may be overly optimistic while headwinds from global manufacturing and now increasingly service sector weakness, suggest any bounce in PMIs may not last.”