The Caixin Manufacturing PMI increased from 50.9 to 51.1 in March. Economists forecast a rise to 51.0.
Insights from the March survey revealed that,
- Manufacturing sector activity improved at the most marked pace in 13 months.
- Domestic and overseas demand signaled an improving macroeconomic environment.
- Chinese manufacturers responded to the shift in the demand environment, ramping up production.
- However, employment fell in March, with firms cautious about hiring.
- Average input costs declined for the first time since July 2023. Firms attributed the decline to falling prices for raw materials.
- Manufacturers reduced factory gate prices for the third month and at the most marked pace in eight months.
- Optimism across the manufacturing sector improved in March, with business confidence at the highest since April 2023.
March Survey Takeaways
A pickup in the demand environment and a downward trend in output price inflation could raise hopes of a pickup in economic activity through Q2. Input and output price trends aligned with investor bets on central banks, including the Fed, cutting interest rates in H1 2024.
The Aussie Dollar Reaction to the Caixin Manufacturing PMI
Before the PMI numbers, the AUD/USD fell to a low of $0.65164 before rising to a high of $0.65387.
However, in response to the PMI report, the AUD/USD rose to a high of $0.65267 before falling to a low of $0.65240.
On Monday, the AUD/USD was up 0.15% to $0.65250.