Daily Insight China drags global manufacturing
Group Economics Macro & Financial Markets Research Arjen van Dijkhuizen, Maritza Cabezas & Aline Schuiling +31 20 343 5616
2 October 2015
China’s manufacturing PMIs still below 50 but stabilising, while divergence in Services PMIs widens US manufacturing at slowest pace in two years Slowdown in eurozone manufacturing limited by robust domestic demand
Chinese Manufacturing PMIs still below 50, but stabilising
US manufacturing at slowest pace in two years
China’s PMI data for September published on Thursday
September’s US manufacturing expanded at the slowest pace
showed a mixed picture. Caixin’s Manufacturing PMI came in
in two years. The ISM declined to 50.2 from 51.1 in August.
at 47.2, a touch better than the flash number (and consensus
This confirms the tepid growth of a sector that is being
forecast) of 47 and just below the August reading of 47.3. Still,
severely hit by a strong dollar and the negative impact from
this index is at its lowest level since March 2009, confirming
declining investments in the energy and mining sectors. Indeed
the weakness in China’s industry, which is faced with
the weakness was widespread. Forward looking indicators,
overcapacity and subdued domestic and external demand. In
including new orders decreased by 1.6ppts from 51.7 in
contrast, NBS’ Manufacturing PMI rose marginally to 49.8
August. The uncertainty in the global economy, maintained
(consensus 49.7, in line with the August figure). The NBS
new export orders unchanged at 46.5. Meanwhile, the
index includes the larger (state) enterprises that more directly
employment index fell to 50.5 from 51.2 the previous month.
feel the support of the government’s general easing measures.
Most manufacturing related data has been pointing to weakness, in contrast to the other US economic data which
Caixin’s Services PMI at 14-month low, NBS’s solid at 53.4
remains strong. We think that US manufacturing activity will
Caixin’s Services PMI fell to a 14-month low of 50.5 (August:
remain subdued in the coming time.
51.5), although remaining above the neutral 50 mark. Still, the employment sub-index improved, illustrating the strength of the
Eurozone manufacturing also slowing down
services sector in creating jobs. However, Caixin’s composite
The final estimate of eurozone manufacturing PMI was
output index reached the lowest level since 2009. Meanwhile,
unchanged from the flash estimate; a decline to 52.0 in
NBS’ non-manufacturing PMI was more resilient, staying at a
September from 52.3 in August. Although at its current level
solid 53.4. All in all, while services continue to hold better than
the PMI is still consistent with expansion of the industrial
industry, there is a risk that the weakness broadens. We still
sector, it suggest the sector has lost some momentum. Indeed,
expect the government to add monetary and fiscal stimulus to
the details of the report reveal that the new export orders
keep China’s slowdown gradual. The government has for
component fell in September (to 52.1, down from 52.6 ), while
instance just halved the sales tax on small cars.
the orders-to-stocks ratio edged lower to 1.08 from 1.10. That said, the eurozone’s industrial sector is being supported by the
China’s manufacturing PMIs point to stabilisation
weak euro and the strength of domestic demand, which is compensating part of the slowdown in foreign demand. Indeed,
index
60
the total orders component fell only marginally in September,
58
despite the decline in export orders. The same picture was
56
painted by Germany’s factory orders for August, which were
54
published earlier. Total orders fell by 1.4% mom, with domestic
52
orders rising by 4.1%, orders from other eurozone countries
50
rising by 2.2% and orders from the rest of the world dropping by 9.5%.
48 46 11
12 13 Caixin Manufacturing PMI NBS Manufacturing PMI
Source: Thomson Reuters Datastream
14 15 Caixin Services PMI NBS Non-manufacturing PMI
2
China drags global manufacturing – 2 October 2015
Financial markets Currency markets
Close
Change 1 day
Change 5 days
Change YTD
EUR/USD USD/JPY
1.1174
0.4495
-1.1937
-7.6529
120.49
0.4334
-0.1492
0.5424
AUD/USD
0.7034
-0.5936
-2.1152
-13.8518
USD/CHF
0.9747
0.1233
0.7026
-1.9318
NZD/USD
0.6270
-0.2704
-1.3220
-19.5638
GBP/USD
1.5252
-0.7871
-1.4920
-2.1115
USD/SGD
1.4253
0.4865
2.0477
7.6023
USD/CAD
1.3286
0.0753
0.8502
14.3866
Bond markets
Close
Change 1 day
Change 5 days
Change YTD
2-year German Govt Bond yield
-0.2470
0.0150
-0.0270
-0.1490
10-year German Govt Bond yield
0.6170
0.0270
-0.1570
0.0760
Yield curve Germany
0.8640
0.0120
-0.1300
0.2250
2-year US Treasury Bond yield
0.7032
0.0294
-0.1076
0.0387
10-year US Treasury Bond yield
2.1657
0.0320
-0.1283
-0.0055
Yield curve US
1.4625
0.0026
-0.0207
-0.0442
US 2-year sw ap rate
0.8023
0.0169
-0.1003
-0.0920
US 10-year sw ap rate
2.1665
0.0362
-0.1258
-0.1196
US sw ap curve
1.3642
0.0193
-0.0255
-0.0276
EU 2-year sw ap rate
0.0560
0.0080
-0.0235
-0.1190
EU 10-year sw ap rate
0.9870
0.0230
-0.1140
0.1750
EU sw ap curve
0.9310
0.0150
-0.0905
0.2940
-0.0390
0.0000
-0.0020
-0.1170
0.3260
0.0068
-0.0095
0.0704
18.6800
18.9500
35.5500
Euribor 3 Month ACT/360 ICE LIBOR USD 3 Month JPMorgan EMBI Plus Sovereign S
422.9900
Equity markets
Close
Change 1 day % Change 5 days %Change YTD%
Nikkei 225
18,070
-1.96
-1.06
3.55
Hang Seng Index
21,303
-2.26
-3.02
-9.75
Hang Seng China Enterprises Index
9,570
-2.70
-3.38
-20.15
Australian Stock Exchange S&P/ASX 200 Index
4,998
-2.07
-1.98
-7.63
Singapore Straits Times Index
2,846
-0.79
-0.80
-15.43
Euro Stoxx 50 Index
3,095
0.60
-4.83
-1.65
S&P 500 Index
1,942
-0.01
-2.65
-5.65
MSCI World Daily Total Return Gross USD
725
-1.65
-1.80
-5.55
AEX Index
421
0.29
-3.95
-0.77
-0.85
4.22
15.89
Chicago Board Options Exchange Volatility Index
Commodity markets Reuters/Jefferies CRB Total Return
22
Close
Change 1 day % Change 5 days %Change YTD%
195
-1.03
-2.09
-15.26
1,132
0.63
1.10
-4.48
Generic first NYMEX Crude Light future
47
0.54
-1.15
-12.50
Generic first Brent Crude Oil future
50
0.94
-0.42
-13.59
5,088
0.20
-5.41
-19.24
503
1.56
3.07
-14.67
Gold spot USD/Oz
LME Copper 3 Months Rolling Forw ard Generic first Wheat future Chicago Board of Trade Source: Bloomberg
3
China drags global manufacturing – 2 October 2015
Day
Date
Time
Country
Key Economic Indicators and Events
Period
Latest outcome
Consensus
Monday Monday Monday Monday Monday
28/09/2015 28/09/2015 28/09/2015 28/09/2015 28/09/2015
. 14:30:00 14:30:00 15:45:00 16:00:00
CH US US EC US
Total Sight Deposits bn PCE deflator core - % mom PCE deflator core - % yoy ECB announces weekly QE details Pending home sales - % mom
Aug Aug
495 0.1 1.2
0.1 1.3
Aug
0.5
0.3
0.4
Tuesday Tuesday Tuesday Tuesday Tuesday
29/09/2015 29/09/2015 29/09/2015 29/09/2015 29/09/2015
07:30:00 11:00:00 14:00:00 15:00:00 16:00:00
IN EC DE US US
Repo rate - % Economic sentiment monitor - index CPI - % yoy S&P/Case Shiller house price index Conference Board cons. confidence - index
Sep 29 Sep Sep P Jul Sep
7.3 104.2 0.2 -0.1 101.5
7.0 104.1 0.0 0.1 96.1
104.3 0.0 0.2 96
Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday
30/09/2015 30/09/2015 30/09/2015 30/09/2015 30/09/2015 30/09/2015 30/09/2015 30/09/2015 30/09/2015
01:50:00 09:55:00 09:55:00 10:30:00 11:00:00 11:00:00 11:00:00 14:15:00 15:45:00
JP DE DE GB EC EC EC US US
Industrial production - % mom Unemployment - % Unemployment change - thousands GDP - % qoq Core inflation - % yoy CPI - % yoy Unemployment - % ADP nat. employment report - thousands Chicago Fed - business confidence - index
Aug P Sep Sep 2Q F Sep A Sep Aug Sep Sep
-0.8 6.4 -7.0 0.7 0.9 0.1 10.9 190.3 54.40
0.9 6.4 -4.3 0.7 0.9 0.0 10.9 183.6 53.20
0.9 -0.1 10.9 180.0 52.0
Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday
01/10/2015 01/10/2015 01/10/2015 01/10/2015 01/10/2015 01/10/2015 01/10/2015 01/10/2015 01/10/2015
01:50:00 03:00:00 03:45:00 10:00:00 10:30:00 14:30:00 15:45:00 16:00:00
JP CN CN EC GB US US US RU
Tankan business conditions large enterprises PMI manufacturing - index (official) PMI manufacturing - index (HSBC) - flash PMI manufacturing - index PMI manufacturing - index Initial jobless claims - thousands Markit - Flash PMI ISM manufacturing - index GDP - % yoy
3Q Sep Sep F Sep F Sep Sep 25 Sep F Sep 2Q F
15.0 49.7 47.0 52.0 51.5 267.0 53.0 51.1 -4.6
13.0 49.6 47.1 52.0 51.4
50.7 -4.6
50 -4.6
Friday Friday Friday Friday
02/10/2015 02/10/2015 02/10/2015 02/10/2015
01:30:00 14:30:00 14:30:00 14:30:00
JP US US US
Unemployment - % Change in employment private employment - thousands Change in employment total - thousands Unemployment - %
Aug Sep Sep Sep
3.3 140.0 173.0 5.1
3.3 195.0 201.0 5.1
190 195 5.1
ABN AMRO
Source: Bloomberg, Reuters, ABN AMRO Group Economics (we provide own forecasts only for selected k ey variables and events)
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