China’s private-sector manufacturing PMI is due at 01:45 GMT on Monday (20:45 US Eastern on Sunday), with economists expecting factory activity to keep growing in October, though at a slower pace than in September.
The RatingDog China General Manufacturing PMI, compiled by S&P Global, is forecast to ease to 51.6 from 52.1, according to a Reuters poll. That would still leave the index comfortably above the 50 mark that separates expansion from contraction. September’s reading beat expectations and was the strongest in five months, supported by firmer demand at home and abroad, with foreign sales growing at their fastest pace in seven months.
The release follows a weak set of official figures on Saturday . The National Bureau of Statistics manufacturing PMI fell to 49.3 from 50.1, well below the 50.0 expected in the same Reuters poll, and new export orders dropped to 48.7. Statisticians attributed much of the decline to seasonal factors, including a pullback in overseas orders after a strong September.
The two surveys often diverge. The RatingDog index samples a smaller group of around 650 firms with a heavier tilt toward export-oriented manufacturers, and it collects responses in the second half of each month. The official survey covers more than 3,000 companies at month-end. The private gauge has typically produced the brighter of the two readings, and that gap was clear in September.
Even so, Saturday’s slide in official export orders raises the risk that the RatingDog reading also comes in below forecast, given its exporter focus. A print close to consensus would suggest the official weakness was largely seasonal. A sharp miss would add to concerns about China’s fourth-quarter momentum and to pressure for more policy support, as Chinese stocks come off their worst month in more than a decade.
The data are likely to be watched closely by traders in the yuan, the Australian dollar and industrial metals.
This article was written by Eamonn Sheridan at investinglive.com.
