New Orders Rise, Profits Plunge for Chinese Producers

This daily digest focuses on Yuan rates, major Chinese economic data, market sentiment, new developments in China’s foreign exchange policies, changes in financial market regulations, as well as market news typically available only in Chinese-language sources.

- The offshore Yuan strengthened against the U.S. Dollar on improved PMI reads and the PBOC’s guidance.

- Over 60% of listing companies with losses in the first three quarters are in manufacturing industries.

Yuan Rates

- The PBOC’ guidance and China’s PMI figures led Yuan moves in the early portion of the Asian session on Tuesday. At 9:00 AM Beijing time (21:00 ET on Monday), China’s statistics bureau issued the official PMI print for October, which turned out to be 51.2. This beat expectations of 50.3 and set a new high since July 2014. In the immediate response to the data, the offshore Yuan rose slightly against the U.S. Dollar.

Fifteen minutes later, the Central bank released the Yuan fix for the day: the Yuan was weakened by -93 pips or -0.14% against the U.S. Dollar to 6.7734 on Tuesday. As the Yuan fix was still stronger than the offshore Yuan rate, the offshore Yuan continue to strengthen against the Dollar and move towards the guided level.

At 9:45 AM Beijing time (21:45 ET), Caixin News published its October PMI figure, which was 51.2, beating a consensus forecast of 50.1 and hitting the highest level since July 2014. Following the better-than-expected Caixin print, the Yuan extended gains against the Dollar, with the USD/CNH dropping to 6.7795 as of 22:30 ET.