Spreadex Market Update
Manufacturing Monday as Chinese factory activity contracts for 8th consecutive month
Slightly weaker official figures, at 49.8 against the 50 expected, were countered by an unexpected improvement from the Caixin manufacturing PMI, increasing to 48.3 from 47.2 last month, besting the forecast 47.7 in the process. Now, any signs of improvement from China are a bonus; however, the markets haven’t exploded into life in light of that better than expected Caixin figure largely because in its pre-50 form it still signals the 8 consecutive month of manufacturing contraction in the country. That sent the Shanghai Composite down just shy of 2% this morning, the effects of which gradually filtering into the European open.
Not that things were too bad (yet); dipping by around 10 points, the FTSE is currently holding off from a severe post-Chinese manufacturing data fall despite the worsening form in the perpetual headache the index calls its mining sector. In terms of the UK’s own manufacturing figures analysts are expecting a minor drop to 51.3 from 51.5 last month.
There were similar scenes in the Eurozone, the DAX and CAC teetering between mild losses and stagnation ahead of the region’s own manufacturing PMIs. Already released, the Spanish figure disappointed, at 51.3 against the (optimistic) 51.9 expected and 51.7 last month. That 2 year low continues the country’s dire run of data, yet again flagging up the (election-nearing) nation as the Eurozone’s next hotspot for trouble. Looking to the rest of the region and the German, Italian, French and Eurozone-wide figures are all largely forecast to remain the same month-on-month.
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