Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Chinese PMI causes mild disappointment

15.25 AEDT, Friday 1 February 2013

Chinese PMI causes mild disappointment


By Tim Waterer (Senior Trader, CMC Markets)

If the US Payrolls data is incongruent with the optimistic rally of recent months, a sizeable ‘question mark’ will be placed next to the current elevated pricing levels. So far this year the market has shown a great ability to absorb bad news by reacting with only modest declines, as was the case with the US GDP contraction. However, a poor Payrolls result may be a more significant test of the market’s resolve. While traders will likely give any result around the 160k level a ‘pass’ mark, Federal Reserve officials won’t be feeling overly cheery until we start seeing consecutive prints above the 250k level.

On balance, if the Chinese PMI readings today were disappointing it was only mildly so. It is almost a case of ‘take your pick’ as to which PMI number (the government one or the HSBC one) is the most accurate reflection of the manufacturing story in China, with bullish traders likely to focus on the HSBC reading while the bears will place more stock on the official reading.

If the AUD is a barometer for Chinese economic health then the downward reaction to the PMI data is evidence that the numbers underwhelmed somewhat. Soft domestic PPI data also contributed to AUD weakness today with the currency facing a battle to remain above the 1.04 level. The AUDUSD rate could be looking at a fall to 1.0370 this evening if we see a risk-off theme in the aftermath of the US jobs report. The AUD will likely bear the brunt of any broad downward shift in risk sentiment, while conversely the moves higher by the AUD could be limited with the Euro attracting much of the buying enthusiasm in currency markets these days.

The Australian sharemarket did not spend too much time dwelling on the end of the 10 day winning streak on Thursday. Nor did our market seem overly concerned about the average Chinese PMI data today. The key mining and financial stocks stepped up to the plate as the ASX200 again reclaimed the 4900 level. With the Australian bourse now on a new ‘one day’ winning streak, US jobs data will likely be instrumental in whether 5000 is on the radar for the local bourse next week.
ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Consents And Taxes: Trustpower 'very Disappointed' With Judgement

Trustpower is "very disappointed" with a Supreme Court ruling dismissing its bid to claim tax deductions on $17.7 million of project costs in a case closely watched by large-scale infrastructure developers. More>>

ALSO:

Fruitful Endeavours: Kiwifruit Exports Reach Record Levels

In June 2016, kiwifruit exports rose $105 million (47 percent) from June 2015 to reach $331 million, Statistics New Zealand said today. Overall, goods exports rose $109 million (2.6 percent) in June 2016 (to $4.3 billion). More>>

ALSO:

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news