Asia Market News: Private Sector PMIs from China Deliver AUD/USD and ASX 200 Gains

Bob Mason
Published: Mar 1, 2024, 02:31 UTC

Key Points:

  • The China Caixin Manufacturing PMI increased from 50.8 to 50.9 in February, with new export orders rising.
  • On Friday, the AUD/USD and ASX 200 responded positively to the PMI numbers from China.
  • The overnight US inflation figures from Thursday drove the Nikkei 225 toward 40,000.
Asia Market News

In this article:

China Sees a Pickup in Manufacturing Sector Activity

On Friday, the Chinese economy was in the spotlight. Private sector PMIs for February drew investor interest.

The NBS Manufacturing PMI slipped from 49.2 to 49.1, while the Non-Manufacturing PMI rose from 50.7 to 51.4. Economists forecast PMIs of 49.1 and 50.8, respectively.

However, the Caixin Manufacturing PMI had more weightage. In February, the Caixin Manufacturing PMI rose from 50.8 to 50.9. Economists forecast a fall to 50.6.

According to the February Survey,

  • Manufacturing production rose at the most marked pace since May 2023.
  • New export orders increased for the second month, with manufacturers reporting improved demand conditions.
  • Firms expanded purchasing activity in response to an improving demand environment.
  • Unfinished business declined in February despite manufacturers reducing headcounts.
  • The rate of cost inflation slowed further, with input prices rising at the least marked pace in seven months.
  • Firms reduced selling prices for the second month to win new business.

The pickup in new overseas orders could ease deflationary pressures. However, the focus will shift to Beijing. Lawmakers will meet next week to discuss economic forecasts and policy. Following a series of monetary policy moves, the markets remain hopeful of a fiscal stimulus package to bolster the Chinese economy.

Aussie Dollar Reaction to the China Private Sector PMIs

The AUD/USD reacted to the NBS PMI numbers, initially dropping to a low of $0.64982 before climbing to a post-stat high of $0.65059.

However, in response to the Caixin Manufacturing PMI, the Aussie dollar dipped to a low of $0.65023 before rising to a post-stat high of $0.65076.

On Friday, the Aussie dollar was up 0.13% to $0.65060.

AUD/USD reacts to China PMIs
AUDUSD 15 Minute Chart 010324

The ASX 200 responded to the broadly better-than-expected private sector PMIs. This morning, the ASX 200 was up 0.20% to 7,714.2.

ASX 200 responds to China PMIs.
ASX200 15 Minute Chart 010324

However, the Hang Seng Index remained in the red despite the numbers supporting a partial recovery from early lows. On Friday, the Hang Seng Index was down 0.20% to 16,478. In contrast, the Nikkei 225 was up 1.62% to 39,801, with overnight US inflation numbers fueling bets on an H1 2024 Fed rate cut.

According to the CME FedWatch Tool, the probability of the Fed leaving interest rates at 5.50% fell from 36.8% to 34.5% on Thursday.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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