The Caixin-Markit China Manufacturing Purchasing Managers’ Index (PMI) to fell from 47.3 in August to a preliminary 47.0 in September, while analysts expected a reading of 47.5.
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Almost every sub-component of the index, including employment, new orders, and output were decreasing at a faster rate.
It’s the seventh straight monthly contraction for China’s factory sector.
Last week, the Federal Reserve again delayed its first interest rate increase in nine years, this time saying that it is “monitoring developments abroad” and “international developments”‘.
Asian markets opened weak on Wednesday morning, tracking weakness in the United States markets. The offshore yuan and the Australian dollar both weakened.
The index is at its lowest since March 2009, when the world was gripped by the fallout from the global financial crisis.
The China president of US crane and mining equipment maker Terex Co told Reuters on Monday that he expects half of the country’s machinery makers to close amid a four-year market downturn, though he remained optimistic for the longer-term. The benchmark two-year US Treasury yield fell to 0.67 percent, nearing a two-week low.
“Everyone thinks it’s a market that is declining, but it’s still growing”.
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Investors will get more manufacturing data on October 1, when Caixin and the Chinese government will release final PMI readings for the month of September. Some economists believe current growth is already much weaker than official data suggest. “Fiscal expenditures surged in August, pointing to stronger government efforts on the fiscal policy front”. “Patience may be needed for policies designed to promote stabilization to demonstrate their effectiveness”. European stocks fell, weighing on the euro, as investors grew wary of the impact Volkswagen’s gaming of emissions testing for its diesel vehicles will have on Germany’s biggest export sector.
