On Monday we got the official PMI from China for December, manufacturing slid into contraction:
Earlier today we got the follow-up private manufacturing PMI;
For those unfamiliar with the two separate PMIs from China, the official one tends to survey larger firms, the private Caixin survey includes more smaller firms.
When both drop into contractions tis not a good sign at all and indicates weakness ahead for the factory sector
A recaps of today's data (more at the links) via Reuters:
- The Caixin/Markit survey focuses mostly on smaller businesses, which are believed to be more export oriented. China's official PMI showed factory activity contracted for the first time in over two years, also pressured by weak demand at home and abroad.
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The Australian dollar has been under pressure for the session, selling accelerated after the PMI, dropping AUD/USD to its lowest since February of 2016.
While its possible to make a case for AUD to recover ahead, the combination of trade wars, weaker China data, high household debt, slow wage growth, falling house prices (and whatever I've missed) are placing hurdles in the path.
Ok, maybe they aren't insurmountable ;-)
