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China's Manufacturing PMI growth fastest in two years

Tuesday, Nov 01 2016
China's Manufacturing PMI growth fastest in two years

Chinese manufacturers signalled an improvement in growth at the start of the fourth quarter, with output expanding at the quickest rate in over five-and-a-half years amid a rebound in new order growth. Stronger demand appeared to be led by improved domestic orders, however, as the level of new export sales fell slightly over the month. Meanwhile, companies cut their staff numbers at the slowest pace in 17 months, while backlogs of work continued to accumulate. Inflationary pressures picked up sharply in October, with input cost inflation accelerating to its fastest since September 2011 and output charges rising to the greatest extent since February 2011.

   

The Caixin China General Manufacturing PMI for October climbed to 51.2, up 1.1 compared to the previous month, marking the fastest growth seen in the sector in two years amid apparent signs of an improvement. The index readings for new orders and output for October were both much higher than in September, and those for input and output prices rose even more, indicating a return of inflationary pressure. The economy seems to be stabilizing for the moment, owing primarily to policies implemented to sustain growth. Supportive policies must be continued, or industrial output may be dragged down by a slowdown in investment.

 

Aussie is currently being traded around 0.7670 level. Pair is likely to find support around 0.76 handle and resistance above 0.77 area.

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