• The HSBC manufacturing PMI in May dropped below 50 and the details suggest continued weakness in the short run. The weakness in May appears to have been increasingly driven by domestic demand. On a positive note, export orders appear to be stabilising.
• Today’s manufacturing PMI suggests increasing downside risk but we do not believe that the Chinese economy has entered a new prolonged cyclical deceleration phase, as leading indicators have remained relatively resilient in recent months. Today’s data will not be enough to force new stimulus from the Chinese government but with inflationary pressure also subdued the Chinese government now probably has an easing bias.
Click here to read the full report: Economic Research
Danske Bank