{"id":169650,"date":"2020-04-29T11:03:37","date_gmt":"2020-04-29T15:03:37","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=169650"},"modified":"2020-04-29T10:04:27","modified_gmt":"2020-04-29T14:04:27","slug":"will-chinese-april-pmis-stay-the-course","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/04\/will-chinese-april-pmis-stay-the-course\/","title":{"rendered":"Will Chinese April PMIs Stay The Course?"},"content":{"rendered":"
April 29, 2020<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

China so far has given every appearance of a V-shaped recovery after officially getting a handle on the COVID-19 outbreak in February.<\/p>\n

Of course, at the time, the outlook was bleak. But, a month later, corporate expectations jumped back almost as high as they were before the pandemic. Both the government official and private Caixin PMI surveys were comfortably in growth territory.<\/p>\n

However, the virus spread around the world, impacting demand due to business closures. This could, therefore, see China experiencing a \u201csecond wave\u201d of economic impact.<\/p>\n

Even with a substantial amount of the economy turning towards domestic demand, the world\u2019s second-largest economy is still dependent on exports.<\/p>\n

Unique Conditions<\/strong><\/h2>\n

This is the last major data from China ahead of the extended four-week May Day holiday.<\/p>

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A lot can happen in that short period of time, and with markets still uncertain over potential\u00a0COVID<\/a>\u00a0developments, flight to safety might still overcome any potential upside if the data beats expectations.<\/p>\n

Of course, Chinese PMI data is also very important for AUD, NZD, and JPY. But we could have an uneven market reaction.<\/p>\n

COVID cases are still on the rise, if at a comparatively low level, in Japan. There are increasing worries that more social distancing measures might be needed in the future.<\/p>\n

On the other hand, Australia and New Zealand are coming out of their lockdowns. They may potentially benefit from increased import demand from China.<\/p>\n

What We Are Looking For<\/strong><\/h2>\n

As usual, the official NBS Manufacturing PMI comes out first. And it could have the largest impact on the market.<\/p>\n

Expectations are for it to fall a bit to 51 from 52 in the prior reading. There is an estimation that following the end of the lockdowns last month, there was a flurry of activity as manufacturers struggled to make up for lost time in meeting pending orders.<\/p>\n

Projections are for NBS Non-manufacturing PMI to improve to 53.2 from 52.3 prior. Economists are banking on the rise in consumer demand to maintain its pace, despite some new social distancing restrictions being implemented.<\/p>\n

Analysts aren\u2019t expecting the Caixin survey to do so well. This is mostly because there is a higher preponderance of export companies measured. Projections indicate that Caixin manufacturing PMI will increase to just 50.3 compared to 50.1 prior.<\/p>\n

While technically in expansion, it\u2019s hardly a vote of confidence for the export sector.<\/p>\n

The Market Reaction<\/strong><\/h2>\n

With most of the world finally getting around to easing lockdown measures, the market has taken on a broader appetite for risk.<\/p>\n

There is increasing confidence in a\u00a0U-shaped recovery<\/a>, at least among equities traders. Should we get some disappointing data out of China ahead of a major holiday, it might shake investor confidence and support safe-haven flows.<\/p>\n

We shouldn\u2019t forget that the PMI data comes out as most of the major Chinese firms are reporting what are expecting to be dismal first-quarter earnings.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex China so far has given every appearance of a V-shaped recovery after officially getting a handle on the COVID-19 outbreak in February. Of course, at the time, the outlook was bleak. But, a month later, corporate expectations jumped back almost as high as they were before the pandemic. Both the government official and […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-169650","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169650","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=169650"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169650\/revisions"}],"predecessor-version":[{"id":169660,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169650\/revisions\/169660"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=169650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=169650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=169650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}