China’s flash PMI, the early data compiled for the monthly PMI, is pointing to a marginal rebound in economic growth. The PMI is set to come in at 49.8, up from 49.3 last month. HSBC reports:
The HSBC Flash China Manufacturing Purchasing Managers’ Index™ (PMI™) is published on a monthly basis approximately one week before final PMI data are released, making the HSBC PMI the earliest available indicator of manufacturing sector operating conditions in China. The estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data.
Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & CoHead of Asian Economic Research at HSBC said:
“The flash manufacturing PMI reading picked up slightly to a level close to the break-even mark in August, which is still consistent with around 13% yo-y IP growth. Despite the turmoil in global financial markets, the new exports orders index rose to a three-month high, albeit still marginally below 50. All these data suggest that the hard landing risk is still remote. This provides leeway for the PBoC to keep the current tightening measures in place.”
A credit crisis developing in Europe, a soft landing in China and a muddle through economy in the USA….Futures like the news as equity futures in the USA are rallying about 1%. All in all, I guess this is good news. China remains the primary driver here, but the developments in Europe are fluid and are likely to be drag markets around in the coming weeks.