September Data Suggests Index Recovery Was Temporary

We published a note on how to track Chinese growth in real time using financial and commodity market prices. In these weekly reports, we update the indicators to help us track growth.

Summary

• The short-term recoveries of our market data-based tracker and, more notably, our economic data-based tracker might well be over (Charts 1 and 2).

Manufacturing Improves but Continues to Contract in August

• Our market data-based tracker has been range bound through the summer. This week was no different, it returned last week’s improvement, and then some (-22 points WoW; Table 1). This was due to year-on-year growth falling for all components, except China 10Y yields (Charts 4 to 8).
• A weaker composite PMI helped snap the economic data-based tracker from a three-month period of improvement (Table 2). On the details, manufacturing new orders (49.8) and backlogs (44.1) remained contractionary, as did non-manufacturing new orders (41.1) and backlogs (41.7).

Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

Ben Ford is Researcher at Macro Hive. Ben studied BSc Financial Mathematics at Cardiff University and MSc Finance at Cass Business School, his dissertations were on the tails of GARCH volatility models, and foreign exchange investment strategies during crises, respectively.

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