China: Mixed signals on the economy - TDS

Analysts at TDS suggest that the Sept PMIs displayed mixed signals on the Chinese economy.

Key Quotes

“Manufacturing PMI was 52.4 from a prior 51.7, 5yr high, non-manufacturing PMI rose from 53.4 to 55.4 (the highest since May 2014), but Caixin manufacturing PMI showed growth momentum was slowing, falling to 51 from a prior 51.6.”

“The PBoC cut the amount of cash that banks need to hold as reserves for the first time since Feb’16, in order to spur lending to small firms and the rural sector. The cut is expected to be at least 50bps and applicable to most banks and will be effective from 2018. The liquidity injection is estimated to be close to RMB 750b.”