Yesterday we got the official PMIs, which held quite well

But not confirmed by the private sector Caixin / Markit survey

They are different surveys (different firms, generally not so many big, state firms), so this can account for differing results, but at first take this is not a positive

Comes in at 49.6, its lowest since February of 2009!

  • Under 50 for the first time in 11 months
  • expected 50.1
  • prior 50.3

Key Points

  • Production and new orders both rise only slightly
  • Employment declines at quickest pace since September 2016
  • Renewed falls in both input prices and output charges

Commenting on the China General Manufacturing PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said:

  • "The Caixin China General Manufacturing PMI fell 0.7 points to 49.6 in May, marking its first contraction in 11 months.
  • The subindices of output and new business stayed in expansionary territory, but both fell to their lowest levels since June last year.
  • The subindices of input costs and output prices dropped into contractionary territory for the first time since June 2016 and February 2016 respectively.
  • The sub-index of stocks of purchases signalled a renewed decline, while the sub-index of stocks of finished goods rebounded, indicating that companies have stopped actively restocking as inventories began to stack up. China's manufacturing sector has come under greater pressure in May and the economy is clearly on a downward trajectory."

AUD is giving back the gains it had after the local, capex and retail sales, data