Both
China’s November manufacturing and non-manufacturing PMIs missed
estimates and slumped under the October reading, heading more deeply
into contraction. Given widespread COVID outbreaks and associated
lockdowns and other restrictions the results are not too much of a
shock. China’s National Bureau of Statistics noted slowing on both
the demand and production sides.
Australian
monthly CPI data was published today. The headline came in at 6.9%
y/y (from the previous month’s 7.3%) while ‘core’ trimmed mean
inflation was unchanged on the month at 5.3%. The Australian Bureau
of Statistics implemented their annual reweighting of components in
the data today. If this was not done the headline would have been
7.1% instead of 6.9%. Some of the reweightings are curious. That for
rental costs was weighted lower, at a time when rents are surging
in response to the housing shortage. Power costs (electricity) were
also taken lower at a time of surging energy prices. Curious indeed.
The
monthly CPI needs to be interpreted with care as it excludes around
30% of the quarterly CPI, including energy. The 6.9% figure, though,
will keep the Reserve Bank of Australia on its rate hike path next
week (the meeting is Tuesday, December 6 local time) at a +0.25% move.
In
further data, both South Korean and Japanese industrial production data
came in worse than expected. The South Korean data showed factory
output fell at its fastest m/m since May of 2020, early in the
pandemic. South Korea is often viewed as a leading indicator for the
global economy; the contraction in factory production, with service
sector output slumping too, is a negative sign.
From
New Zealand, business activity indicators fell further, as did
business confidence in the most recent ANZ NZ Business Outlook
survey. Inflation expectations hit a record high.
EUR and GBP both gained against the US dollar during the session. The magnitude of moves was small. Bitcoin rose back above US$17K at one stage.