The key data focus for the session here in Asia-Pacific today was the Caixin / S&P Global Manufacturing PMI for May 2023. This was expected to remain in contraction, especially following yesterday’s very disappointing official PMIs, those for China’s National Bureau of Statistics (NBS). ICYMI:

Today’s PMI burst into expansion, handily beating expectations and much improved from April. The better result saw the Australian dollar improve on the session, as did the yuan and Chinese equity markets.

In other data Australian Q1 capex hit a 7-year high in Q1, the outlook for further business expenditure is solid. It should be noted that higher costs of equipment and building contributed to the improvements.

In Japan, the manufacturing PMI moved into expansion for the first time in 7 months. Capex data for Q1 showed gains for the eight consecutive quarter, plant and equipment investment jumped at the fastest rate since 2015.

The news of note, although expected, was the approval of the US bipartisan bill to suspend the government's $31.4 trillion debt ceiling. The US House of Representatives voted with a large majority to pass the bill. It now heads to the Senate for its vote and is expected to pass there also. The news of the passing saw US equity index futures pop higher on Globex. This was quickly reversed though and, as I update, ES and NQ are not too far from their low.

Asian equity markets:

  • Japan’s Nikkei 225 +0.3%

  • China’s Shanghai Composite +0.4%

  • Hong Kong’s Hang Seng +0.8%

  • South Korea’s KOSPI -0.4%

  • Australia’s S&P/ASX 200 +0.4%

audusd wrap chart china caixin pmi 01 June 2023