Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Trader Strategy
Access both platforms from your single Saxo account.
China Update: Manufacturing new orders expand, services growth decelerates in mixed August PMI data
Redmond Wong
Chief China Strategist
Summary: China's August manufacturing PMI increased to 49.7, with the New Orders sub-index reaching 50.2, indicating the first expansion in new orders since March. Non-manufacturing PMI fell to 51.0, Services to 50.5, while Construction strengthened to 53.8. The data suggests uncertain manufacturing improvement, waning services momentum, and construction improvement but challenges ahead.
China's NBS manufacturing PMI rose to 49.7 in August from July's 49.3, surpassing the projected median forecast of 49.2. Despite this improvement, the reading still indicates contraction. Particularly noteworthy is the resurgence of the New Orders sub-index to 50.2, marking the first expansion since March. Another positive sign is the increase in the Output Prices sub-index to 52.0 from 48.6. However, New Export Orders, while showing modest improvement, remain at 46.7, firmly within contraction territory. Additionally, the Manufacturing Employment sub-index slid to 48. Despite glimpses of improvement in new orders and output prices, the prevailing conditions of China's manufacturing sector remain challenging.
Conversely, the non-manufacturing PMI decreased to 51.0 in August, down from July's 51.5, a more pronounced decline compared to the 51.2 predicted by economists surveyed by Bloomberg. The Services sub-index decreased by a full point to 50.5 in August, despite the resilience of travel-related components. On the other hand, the Construction sub-index strengthened to 53.8 in August from 51.2, driven by increased infrastructure construction resulting from an acceleration in the issuance of local government special bonds. Nevertheless, the New Construction Orders sub-index remained in contraction territory, in spite of climbing to 48.5 from 46.3. This suggests an impending slowdown in construction activity given the depressed property market.
The NBS PMI data for August indicate early traces of resurgence in the manufacturing sector, although the broader perspective remains enshrouded in uncertainty. Concurrently, the service sector demonstrates a fading momentum in contrast to preceding months, thereby ushering in specific economic vulnerabilities. The construction sector's potential also hangs in the balance due to the consistent weakness in new construction orders. Regrettably lackluster, this report is unlikely to furnish the requisite support for the Chinese equity market and industrial metal prices in the near term.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
China Outlook: The choice between retaliation or de-escalation
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: A bumpy road ahead calls for diversification
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX outlook: Tariffs drive USD strength, until...?
John J. Hardy
Global Head of Trader Strategy
-
Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)