The key focal point of the session was the China data, the official PMIs for May. Both the Manufacturing and non-Manufacturing PMIs fell from April, with Manufacturing slipping further into contraction.
The official manufacturing purchasing managers’ index (PMI) fell to 48.8 in May, down from 49.2 in April, according to the National Bureau of Statistics, reaching its lowest level in five months. The 50-mark separates growth from contraction on a monthly basis.
The official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, fell to 54.5 in May from 56.4 in April, expanding at the slowest pace in four months.
Large enterprises (many state-owned and supported) fared better than mid-size and small, coming in at 50.0, 47.6 and 47.9, respectively. China’s National Bureau of Statistics issued a statement following the data calling for measures to strengthen the foundation for recovery and development.
We also saw Australia CPI released earlier today as CPI continues to exceed market expectations, rising in April 2023. Still, it failed to still the further fall in the Australian dollar.
New data from the Australian Bureau of Statistics (ABS) showed that on an annual basis inflation rose to 6.8 per cent, up from 6.3 per cent the month prior.
This month’s annual increase of 6.8 per cent is higher than the 6.3 per cent annual rise reported in March 2023, but is below the high of 8.4 per cent recorded in December 2022.
Reserve Bank of Australia Governor Lowe also testified earlier today, and he noted that “I want to reassure you we’re serious,” and “The risk to inflation is to the upside and we need to be attentive to that.”