China’s factory activity reading hits 11-year high in February
Most Asian-Pacific markets rose today as investors and traders digested a slew of positive economic data. The Chinese National Bureau of Statistics (NBS) announced that its Manufacturing PMI rose to 52.6 in February, the highest level recorded in the last eleven years. A report by the Australian Bureau of Statistics (ABS) showed that the country’s GDP grew by 0.5%, on a quarter-to-quarter basis, in the last quarter of 2022.
ISM Manufacturing and Services PMIs in the US
The ISM will publish data regarding the US Manufacturing (01.03) and Services (03.03) PMIs in February. Some market analysts note that these fresh sets of data could shed light on how the US economy performed during the second month of 2023.
According to forecasts, the Manufacturing PMI is expected to come in at 48.0 while the Services one is likely to come in at 54.5. The chair of the ISM’s Manufacturing Business Survey Committee noted in a report that “there is clear evidence of demand softening. We knew the first half (of 2023) would be a bit of a struggle, we don’t know if we’ve hit bottom yet.”
Japanese Tokyo CPI report
The Japanese Statistics Bureau will publish its February Tokyo CPI report on Thursday. The Tokyo CPI measures the change in the price of goods and services purchased by consumers in the capital of Japan. Economists expect the Tokyo CPI to come in at 4.1% in February, on a year-to-year basis. The annual Tokyo headline CPI had landed at 4.4% in January, in line with analysts’ expectations.
Commerzbank: US inflation too high
A report released by Commerzbank suggests that hopes of a quick further decline in the US inflation rate have not materialised. The bank’s analysts wrote that “our review of various core measures suggests that the inflation trend is probably still above 4%, way above the Fed's 2% target. The Fed will hope that the effects of rate hikes have not yet shown up because of the usual lags in their impact. If this does not happen, the Fed has obviously not cooled demand sufficiently. Significantly more rate hikes than previously expected (our forecast: three further hikes by June of 25 basis points each to 5.50% for the upper end of the target range) would then be likely.”
Switzerland: No recession in 2023?
The Swiss State Secretariat for Economic Affairs (SECO) announced zero economic growth in the last quarter of 2022, citing the challenging international situation that hit exports and the manufacturing sector. The report published by SECO said that “while the less cyclically sensitive chemical and pharmaceutical industry recorded further growth.... the other industrial sectors contracted.”
Commenting on the state of the Swiss economy, the head of SECO’s Economic Policy Directorate said that “from the current perspective I would not expect a recession.” The government, which earlier projected that the Swiss economy would expand by 1.0% in 2023 and 1.6% in 2024, is scheduled to release its updated prediction for this year on March 16th.
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