China PMIs show strong recovery amid US presidential debate chaos
China’s PMIs were seen supporting sentiment in the latest September release while the first US presidential debate unfolded with little fresh insights into the election outcome.
September PMIs broadly surprised
Arriving ahead of expectations had been the Chinese official PMIs whereby both the manufacturing and non-manufacturing PMI topped consensus. Specifically, the manufacturing gauge came in at a 6-month high while the non-mfg PMI reading was the highest noted since November 2013. Caixin manufacturing reading for September edged down to 53.0 but remains well in expansion territory. The broad takeaway ahead of the National Day holiday in China from October 1-8 and for Hong Kong and Taiwan for the rest week had been continued strong rebound from the Chinese PMI readings.
A quick comparison of the Caixin PMI with the likes of the US and eurozone readings had seen this alignment of the recovery picture. Drilling deeper into the Chinese data, the new orders and export orders components across both the official and Caixin manufacturing readings had also been ones in red, reflecting the improvement in global demand. As a result, this had seen to a boost for market sentiment in Asia though fluctuations with the US presidential election unfolding in tandem had also been noted.
US presidential debate chaos
While items ranging taxes to climate change had been brought to the table in the first US presidential debate, most of what had been discussed in what appeared to be a chaotic name-calling session were not new to the market. In turn, that had a limited effect on market in the immediate aftermath of the debate. Other than making a reference to China surrounding the Covid-19 spread by President Donald Trump, trade policies had also not been discussed thus seeing to a lack of substantial reaction at this point. Some selling had however been noted across US futures and the erasing of gains for Asia later into the day. Despite the verbal brawl having been one to see to no change in Democratic nominee – also an Asia equity and FX friendly choice – holding on to the lead in polls, the mayhem of a debate had perhaps lifted the short-term risks of a contested election. One for risk sentiment.
USD/CNH however found little reasons to be alarmed at this point, still trading heavy in the narrow range into Wednesday. Despite the slight USD index strengthening, positive Chinese PMI readings keeping the downward momentum unchanged for USD/CNH, watching further downsides in the short-term. China’s absence from Thursday over October 1-8 would however make for low participation in the period.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Live prices on most popular markets
- Forex
- Shares
- Indices
