This week market participants were eagerly awaiting economic data points which should possibly offer more visibility of whether negative economic data has bottomed, or whether economic slowdown has maintained its pace. Indeed, this week several purchasing manager index (PMI) were reported across the globe. 

China surprised with a stronger-than-expected November PMI, a surprising data point following months of weakness. The official manufacturing PMI rose to 50.2 from 49.3. It was the first time above the 50 boom/bust level since April. The official non-manufacturing PMI rose to 54.4 from 52.8. This led to a rise in the composite to 53.7 from 52.0, the highest since March.

Furthermore, Japan's data was generally better than expected. The November manufacturing PMI rose to 48.9 from the flash report of 48.6 and the October reading of 48.4. Despite a positive still below the 50 expansionary level.

Meanwhile, capital spending in the third quarter rose by 7.1 per cent but corporate profits fell by 5.3 per cent, which was twice what economists expected. 

Still within the Asian front, South Korea's November trade figures suggest that if the region's slowdown in trade has ended, a recovery scenario may take a while. South Korea's exports and imports were weaker than expected, though they posted sequential improvement. Meanwhile, the country’s November manufacturing PMI rose to 49.4 from 48.4. 

Indonesia and Malaysia also reported manufacturing PMIs that showed sequential improvement but still below 50. The Philippines saw its PMI slip from 52.1 to 51.4 and Thailand stands out with a decline to 49.3 from 50.0.
In Europe, the manufacturing PMI for the eurozone area improved from the flash reading of 46.6 to 46.9 and 45.9 in October. This was a function of German and French reports being revised up. 

Germany's PMI was reported at 44.1 from the 43.8 flash reading, while the French reading ticked up to 51.7 from the 51.6 initial estimate and 50.7 in October. 

Italy slipped to 47.6 from 47.7; close to its lows of 47.4 in March. Meanwhile, markets also saw Spain bounce from its cyclical low of 46.8 in October to 47.5 in November. Separately, UK's manufacturing PMI was reported at 48.9, better that the expected levels of 48.3. 

In the US manufacturing PMIs showed an increase to 52.2 from the previous 51.3 levels, showing the third consecutive increase. However, more leading indicators such as the ISM PMI were pretty weak with readings at 48.1, from the forecasted levels of 49.2. 

Surely, at this juncture market participants are watching very closely all levels of economic indicators. However leading indicators are being given more weight based on the fact that of their relevance to a forward looking view of economic health. Indeed, given that the trade-war saga is still unresolved, leading indicators will help investors form an opinion and thus position themselves accordingly. 

This article was issued by Maria Fenech, credit analyst at Calamatta Cuschieri. For more information visit The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.

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