China’s Caixin final manufacturing PMI at 48.6 in November

The November PMI from the Markit’s Nikkei Malaysia Manufacturing Purchasing Managers’ Index was 47.0, down from 48.1 in October, as the overall contraction reflected declines in four out of five PMI components – production, new orders, employment and stocks of input.

CHINA CURRENCY: The IMF’s move to include the yuan along with the dollar, pound, euro and yen in its yardstick basket reflects the rising importance of China’s economy and its currency.

The official Purchasing Managers’ Index (PMI), compiled by the National Bureau of Statistics, edged down 0.2 points to 49.6 points against an expectation of a flat result.

However, a pickup in services activity in a similar official survey offered some hope that the sector would offset persistent weakness in “old economy” growth drivers such as manufacturing.

“The slowdown in growth combined with weak inflationary pressures support further rate cuts”, Ms. De Lima said.

Meanwhile, in the first indication of how Asian trade performed in November, South Korea’s exports fell by 4.7% from a year earlier, the 11th month of contraction. After falling for six months, the output sub-index returned to a neutral reading of 50.0 in November.

With subdued demand at home and overseas, activity in China’s factories shrank in October for a third straight month, fuelling fears that the economy may be cooling more rapidly than expected.

“Facing downward pressures on the economy, companies’ buying activities slowed and their will to restock was insufficient”, it said.

The government has depended on monetary loosening to stimulate growth. A sharp rise in the economic growth figures puts the data at odds with other indicators such as industrial production and the PMI surveys which have remained less upbeat. In Australia, the central bank’s (RBA) final meeting before the summer break is highly unlikely to end with a change in policy.