The global manufacturing slowdown, which has been led by China, shows clear signs of bottoming. This is our conclusion from the October PMIs, which underpins our view that China has hit the cyclical trough. Both the national China PMI manufacturing and the private Caixin PMI manufacturing show signs of a cyclical bottom in China. The Caixin PMI manufacturing index showed the biggest one-month increase in 15 months as it rose from 47.2 in September to 48.3 in October (consensus: 47.6, DBM: 47.7).
The details were good, with a strong rise in both new orders from 46.4 in September to 48.0 in October. The order inventory level also improved as the inventory index fell from 52.5 to 50.2. The NBS PMI manufacturing was less upbeat staying flat at 49.8 (consensus: 50, DBM: 50). However, this index rose last month, pointing to a bottom in the Chinese business cycle. The new orders index moved slightly higher in October again to 50.3 from 50.2.
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