China: PMI rebound seen as fragile without support – TD Securities

TD Securities’ Global Strategy Team reports that China’s March PMIs moved back into expansion, with Manufacturing and Non-manufacturing both beating expectations. They attribute the rebound partly to firms front-loading orders due to the US-Iran war and caution that a sustained recovery is unlikely without significant policy support, especially with construction still in contraction.

Expansionary PMIs tempered by policy doubts

"China PMIs rebounded into expansion (>50) in March, with both indices surpassing expectations."

"Manufacturing PMI came in at 50.4 (cons: 50.1, prior: 49), led by big jumps in output and new orders."

"This tracks closely to the rebound in these categories from global PMIs as firms front-load orders to mitigate the impact from the US-Iran war."

"Non-manufacturing PMI printed at 50.1 (cons: 49.9, prior: 49.5), with services at 50.2 but construction remaining in contraction at 49.3."

"Overall, we won't read too much into the March's print as it could be distorted from the US-Iran war and a sustained bounce is unlikely without sizable policy support."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)