China's manufacturing PMI data for March exceeded the market expectations by a long shot, which gave investors some reasons to be optimistic for a relatively fast "V"-shaped recovery of the global economy.
According to the official NBS data released on Tuesday, the Manufacturing PMI in the world’s second-biggest economy surged to 52.0, up from the historic low of 35.7 that was recorded in February. The consensus forecasts were projecting a more moderate jump to only 44.9.
China Manufacturing PMI. Image source: TradingEconomics.com
The economic activity in China starts to stabilise as the government recently began easing up the lockdowns in the industrial parts of the country, and individuals are now being allowed to return to their workplaces.
According to “Trading Economics”, The massive monthly jump in manufacturing activity is the largest one on record since September 2017, which is attributed to a number of various factors.
New orders in China boosted the national demand even though exports remained subdued owing to the lockdowns and muted economic activity in many of China’s foreign partners.
The low prices of crude oil internationally, which are owing to the continuation of the price war between Saudi Arabia and Russia, supported the observed growth in Chinese manufacturing.
Meanwhile, the Chinese Yuan continued its depreciation against the US dollar, albeit at a slower pace. The USDCNY continued its consolidation in a range between the major resistance level at 7.1503 and the major support at 7.0634.
This is likely a transitionary stage in the pair’s development of a broader bullish trend. The global demand for the greenback remains high, despite a recent slump owing to changed underlying conditions.
USDCNY 1D Price Chart. Image source: Trendsharks ©, created with TradingView.com
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