Key Points
- Flash China Manufacturing PMI� at 49.1 in May (48.9 in April). Two-month high.
- Flash China Manufacturing Output Index at 48.4 in May (50.0 in April). 13-month low.
Commenting on the Flash China Manufacturing PMI survey, Annabel Fiddes , Economist at Markit said: �The Flash China Manufacturing PMI pointed to a further deterioration in operating conditions in May , with production declining for the first time in 2015 so far. �Moreover, softer client demand, both at home and abroad, along with further job cuts indicate that the sector may find it difficult to expand, at least in the near - term, as companies tempered production plans in line with weaker demand conditions. �On a positive note, deflationary pressures remained relatively strong, with both input and output prices continuing to decline, leaving plenty of scope for the authorities to implement further stimulus measures if required.�
The positive note is "deflationary pressures are strong so that leaves scope for stimulus." Isn't that a hoot?
And if there was strength, that would be a positive as well. I guess it's simply impossible for things not to be bullish.
Two Point Summary
- Economy weak - stimulus needed - stimulus is bullish
- Economy strong - no stimulus needed - also bullish
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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