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

 

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

The Nation: Call For Cross-Party Auckland Housing Plan

Penny Hulse calls for cross-party accord on Auckland housing because “it’s too important to score political points on”. More>>

ALSO:

Flu Season: Overcoming Vaccination Reluctance

While research shows that 40% of New Zealand businesses offer free or subsidised flu vaccinations to employees this time of year, HR professionals say persuading staff to participate is the biggest challenge. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news