1. China's September PMI rose from 51.7 to 53.8, above the 52.5 consensus
2. This month's reading is the highest since the month of May's 53.9 was reported on May 31st
3. New Orders increased from 53.1 to 56.4
4. The Output Index increased from 53.1 to 56.3
5. Export Order index increased from 52.2 to 52.8
The Chinese economy slowed down in the second quarter of this year as concerns regarding the euro debt crisis restricted growth. This month's improving PMI provides mild evidence that the Chinese industrials industry has confidence that the euro headwind is lifting. Improvements in domestic consumption, investment, and exports suggest a reversal in the GDP slowdown experienced in Q2 +10.3% versus Q1 +11.9%.
The capital markets await the release of U.S. ISM. However, this report supports continued robust demand for natural resources throughout the remainder of 2010. The emerging markets remain the marginal buyers of gold and natural resources in a pattern that is similar to the late 1970s here in the United States.
CHINA PMI 1/31/08 TO 9/30/10
CHINA GDP 3/31/00 TO 6/30/10