As always there are two Chinese Purchasing Manager Index reports - the government which focuses on larger, state controlled companies, and the HSBC report which focuses on smaller companies.  The Government report is out and we have a reading of 50.4 versus the 51.2 in September.  The estimate was 51.7 so this was a bit of a disappointment.   That said, for those who love easy money this heartens their case for China to re-engage in easy money policies sooner rather than later; even as the country is dealing with the havoc of many bad loans from their last round of easy money.

  • The manufacturing index from the logistics federation and National Bureau of Statistics is based on a survey of purchasing managers in more than 820 companies in 20 industries. The gauge hasn’t fallen below 50, the level dividing expansion from contraction, since February 2009.
  • The new orders index fell to 50.5 from 51.3 in September and a measure of output dropped to 52.3 from 52.7. New export orders contracted, declining to 48.6 from 50.9 the previous month, the logistics federation said.

The prices index dropped dramatically....

  • ...the input prices subindex, an indicator of inflationary pressure, declined to 46.2 from 56.6 in September.

The HSBC report comes out later in the day (night) but the two are generally within a point of each other.