In China manufacturing data for October showed the nation’s recovery strengthening and export orders rising, which gives policy makers more room to pare stimulus measures in coming months.
Manufacturing expanded at the fastest pace in 18 months, according to a purchasing managers’ index released by HSBC Holdings Plc today and also a government-backed PMI released yesterday. The HSBC index rose to a seasonally adjusted 55.4 from 55 in September, an e-mailed statement showed.
Premier Wen Jiabao’s stimulus package and an unprecedented $1.27 trillion in new loans this year are sustaining China’s rebound after exports slumped because of the global financial crisis. China may tighten monetary policy from the second quarter of next year because of stronger growth and rising consumer prices, Goldman Sachs Group Inc. said Oct. 29, Bloomberg reports.
Combined with a PMI released by the National Bureau of Statistics on Sunday, the surveys point to an acceleration in annual gross domestic product growth to double digits in the fourth quarter, said Wensheng Peng and Jian Chang with Barclays Capital in Hong Kong.
The euro zone PMI will be released at 0858 GMT, while the Institute for Supply Management is due to announce the U.S. manufacturing index at 1500 GMT.
Economists polled by Reuters expect manufacturing in the euro zone to return to growth while expansion is expected to pick up steam in the United States, Reuters reports.
News agencies also report, export orders climbed to 55.6 from 54.4, the fifth straight month of gains, and the most robust pace seen since June 2007. Exports orders were particularly pronounced to North America, according to manufacturers' comments compiled by the survey.
"The ongoing strong recovery in the manufacturing sector should gain further momentum in the coming months" said Hongbin Qu, chief economist for China at HSBC.
Other components of the indexes pointed to still-rapid growth, but an easing from highs of recent months, MarketWatch reports.
Russian President Vladimir Putin and German Chancellor Angela Merkel had had a few fights and used strong language because of the Ukrainian crisis in 2014