Chinese Manufacturing Still Struggling for Traction
(eToro Blog) Chinese manufacturing data was released earlier today, and market players had been hopeful that this month would see significant improvement after August’s dismal reading. But improvement is relative, and the HSBC PMI data did edge higher to 47.8 from August’s 47.6 reading, but remains firmly entrenched below the threshold which divides expansion from contraction, and the reading for one key sub-index which measures manufacturing output fell to an 10-month low at 47.0. Analysts are now concerned that despite Beijing’s efforts, the Chinese economy is going to get the hard landing that they had hoped to avoid.
Last week, the government announced more measures that could help to stabilize export growth, as well as a whole host of infrastructural projects which could boost domestic growth, and analysts believe that they could reflect in Q4 numbers and beyond. Nonetheless, this latest data is sure to put more pressure on Beijing.
Economies linked to China growth, especially those in the Pacific Rim, are typically harder hit by dismal data which is reflected in their currencies’ value, and such was the case with the Australian Dollar which has shed about 0.8% against the U.S. Dollar. The AUD/USD pair is currently trading at 1.0395, recovering from a session low of 1.0369 while OpenBook sentiment is being driven by bears, 66% to 34%.
Over the past several hours, OpenBook guru mfmfuzz from Sri Lanka has been closing profitable positions in the pair, working both sides of the trade. Just within the past six hours, the guru has closed four shorts with gains that ranged from 1.70% to 3.26% and a pair of longs with an average gain of 1.75%. The guru also has a single short position still open which is approaching break even. The trader has a 99.8% allocation in the AUD/USD, which has yielded a 3.2% gain over the past six months, while a 0.1% allocation in the EUR/CHF earned 1.8%. The guru has realized equity of more than 300% in that same period.
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