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Another dismal PMI reading from China

Published Wednesday, September 23rd, 2015

This is turning out to be a very gloomy week. The VW scandal continued to reverberate yesterday lopping another 18.5% off the company’s share price and taking fellow travellers with it. Now overnight comes another blow from China with a flash PMI number well below forecasts.

Expectations had been for a reading of 47.5 following a final August number of 47.3. The September reading has come in at 47.0, the weakest level for six and a half years with new orders falling to a four-year low of 46.0 from 46.6 in August. The Shanghai Composite closed down 2.2% and the MSCI Asia Pacific excluding Japan lost 2.4%.

Almost in anticipation we had the chief economist of the ECB saying yesterday that risks in the world economy “have increased significantly”. Cue more QE on the way. Speaking from the same script in the US, Christine Lagarde warned that “downside risks are greater than they were”. The Fed it seems had good reason to be worried and hold back no matter that there will be consequences.

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Posted by David Hufton