Analysts at TD Securities note that China’s Caixin PMI surprised to the upside at 50.2 in May (mkt 50.0, TD 49.7) the same as the previous month.
Key Quotes
“The resilience of the Caixin PMI contrasts with the official PMI which fell to 49.4 in May from 50.1 previously. This can be attributed to the greater focus of stimulus towards small and medium size companies, which the Caixin PMI is more attuned to.”
“The survey may also not fully reflect the impact of higher US tariffs on China, which only went into force over the weekend even though they were announced earlier. The resilience of the Caixin PMI may not last as indicated by declines in confidence in medium and small enterprises in the official PMI. We think this points to further targeted stimulus ahead.”
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