China PMI Points to Rising Inflation Risks

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.The HSBC Flash China Manufacturing PMI was released this morning. This measure differs significantly from the official CFLP manufacturing PMI, but it does give some insight into what to expect from the CFLP PMI for August (to be published on 1 September). Although still contracting fractionally according to HSBC, the manufacturing PMI and manufacturing output index are both at two-month highs.

China's HSBC manufacturing PMI report jumped to 52.3, a two-year high in January. However, China's official NBS manufacturing PMI unexpectedly fell 50.4.

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.Markit released the Flash HSBC China Manufacturing PMI for February based on 85% to 90% of responses this morning. The flash estimate came in at 51.5 compared to the final 54.5 in January as a result of a combination of seasonal factors as well as quantitative tightening. Wow, what a drop! That will surely be negative for equity markets and especially the Shanghai Composite Index? No, not necessarily.

Fresh on the heels of a report that shows China Manufacturing PMI barely Above Contraction comes news the Chinese service sector is following suit. The Markit China Composite PMI shows Activity growth eases across both the manufacturing and service sectors in April. Key Points

Chinese manufacturing PMI for February is out at 8 p.m. ET. Analysts polled by Bloomberg are looking for PMI to rise to 50.5, up from 50.4 the previous month.

The contraction hit parade keeps humming along. Japan Composite data show first fall in business activity since November 2011 Business activity in Japan’s service sector decreased for a second successive month during June, as new order growth remained muted.

Econ Grapher submits:This week we look at the PMI results for China and the U.S. and reflect on their implications. Then we review the monetary policy decisions out over the past week including the announcement from the U.S. FOMC. Then we wrap up with a look at the U.S. employment figures for October, and the New Zealand employment stats for the September quarter. 1. China PMI

HSBC China Manufacturing PMI™ shows Output falls at fastest pace since March. Key points New export orders fall at fastest rate in 42 months Output and input prices continue to fall Purchasing activity declines amid weak demand and lower production requirements