Manufacturing PMIs around the world bounced higher in January as
the outlook for the global economy continued to improve.
Manufacturing data from China to England showed improvement in the
global manufacturing sector in the month, a positive sign for the
In China, the official Manufacturing PMI fell unexpectedly to
50.4 from 50.6 in December, missing expectations of a reading of
50.9. However, the methodology of the index was changed this month
to include 3,000 companies from the previous 600, so the numbers
may not be comparably to previous data and should require revisions
to old data to adjust for the larger sample size.
Positively, the HSBC China Manufacturing Index, the survey
compiled by Markit and now more comparable to the official number
due to the change in methodology, rose to 52.3 in January from 51.9
in December. Economists had been looking for a rise to 52.1 in
January, so the data beat estimates, sending Chinese and Australian
shares sharply higher.
More good news came from Europe, as the Eurozone Manufacturing
PMI rose nicely in January. The Manufacturing PMI for the eurozone
rose to 47.9 from 47.5 in December, beating forecasts of a flat
reading at 47.5. Although still showing contraction, the index
shows that the rate of contraction is slowing and that the European
manufacturing sector could be on the rebound.
Manufacturing PMI's were released for the following large
Germany's Manufacturing PMI rose sharply to 49.8 from 48.8 in
January on expectations of a flat reading. France's Manufacturing
PMI was flat at 42.9 on expectations of a flat reading. Italy's
manufacturing sector improved sharply as the PMI rose to 47.8 from
46.7 in December, beating forecasts of a reading of 47.2. Spain's
manufacturing PMI improved sharply as well, rising to 46.1 in
January from 44.6 in December, beating forecasts of a reading of
Markets were on the move following the PMI's, especially those
in Europe. Stocks rose in Germany, France, and the U.K., however
Spanish and Italian shares declined following the removal of the
short-selling ban on Spanish stocks. The euro was also broadly
strong with the EUR/USD rising above 1.3650, the EUR/JPY rising
above 125, the EUR/GBP rising above 0.86, and the EUR/AUD rising
The news is positive for investors who were concerned that
stocks were rising and financial markets were seeing relaxed
stresses while the broad economy was not improving. If the services
PMI's, to be released next week, also show improvement, it would
confirm that the Eurozone and the broad global economy are in fact
improving as hoped.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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