Indian P.M.I. Rises to 52.3 % : HSBC India Com. Index

The manufacturing and services sector index, as measured by HSBC India Composite Index, rose sharply to a three-month high in November to 52.3 from 50.3 in the previous month, even though the private sector output rose only modestly, says the HSBC Purchasing Managers Index.

"The HSBC India Composite Index, which covers both the manufacturing and service sectors, posted 52.3, up from 50.3 in October, to a three-month high. The seasonally adjusted business activity index posted 53.2 in November, above the 50.0 no-change threshold that separates growth from contraction.

Nonetheless, the latest rise remains well below the series average," HSBC Purchasing Managers Index (PMI) said here today. Commenting on the PMI survey, HSBC India and Asean chief economist Leif Eskesen said, "the services sector demonstrated resilience, with both activity and new businesses on the rise. Unfortunately, inflation continues to tick up as well, calling for RBI to maintain tight monetary conditions for an extended period."

However, report notes that private sector output rose only modestly in the month but expansion was stronger than the fractional growth seen in the previous two surveys. Moreover, rising from October reading of 49.1, expansion was the first signalled in three months, it said, adding in contrast, output in manufacturing sector rose at the weakest pace in 32 months.

New business received by private sector companies rose for a 31st month in row in November, making it the fastest pace of growth since August, but remained well below the series average. However, the report notes that a stronger expansion in new orders received by the service providers offset a weaker rise in the manufacturing sector.

China PMI, US housing Market and FOMC delusion Next week

Week ahead economic calendar [19 - 23 Sept] 
Central bank policymaking under the spotlight
ƒ FOMC and MPC updates to be watched for signs
of further stimulus
ƒ Flash PMIs for China and Eurozone to provide
first insight into September growth trends
The highlights of the week are updates on US and UK central 
bank policymaking and flash PMI surveys for China and 
Eurozone.
The US Federal Open Market Committee (FOMC) decision
on Wednesday will be watched for the possibility of additional
stimulus. Options may include buying more government
bonds, switching from shorter-term to longer-term bonds to
help reduce mortgage and other long-term debt interest
rates, or cutting the 0.25% interest rate it pays on the $1.7
trillion of excess reserves that banks hold at the Fed, as this
should stimulate bank lending.  However, there is a concern
that banks, already under financial strain, could be hurt
further by any reduction in mortgage lending margins or any
lowering of the excess reserve interest rate. Furthermore,
with Bernanke still expecting the recovery to regain
momentum later this year, there is a distinct possibility that
the Fed will do nothing.
The Bank of England elected to do nothing at its September
Monetary Policy Committee (MPC) meeting, but the minutes
from the meeting are likely to  indicate that the MPC grew
increasingly worried about the fragility of the economic
recovery following a raft of weak data. Both Spencer Dale
and Martin Weale have moved away from their hawkish
stances, and others may have joined Adam Posen in voting
for additional stimulus.
The first indicators of the health of the global economy in 
September will be provided by flash PMI data for China and 
the Eurozone. PMIs showed manufacturing roughly
stagnating in both China and the Eurozone in August, down
sharply since the start of the year, while growth of services
slipped closer to stagnation in the Eurozone. Perhaps of
greatest interest will be whether growth in Germany – the
Eurozone’s main growth driver in the early stages of the
recovery – continues to disappoint as the financial crisis hits
confidence. A steep slide in business confidence in the
European banking sector (see chart) suggests that further
weakness in the wider economy lies ahead.

The UK Household Finance Index (HFI), compiled by Markit,
will provide the first insight into consumer spending, savings
and debt trends in September, as well as inflation
expectations, house prices and job security. Households
reported the sharpest deterioration in their finances since the
survey began last month, exceeding even that seen during
the worst point of the recession.
A snapshot of the US housing market will be provided by the
National Association of Home Builders (NAHB) index, which
remained at a very depressed level in August.    
Tuesday
German producer prices data will highlight supply chain price 
pressures. Rates of increase accelerated, both in annual and
monthly terms in July. Next up for Germany is the ZEW
survey. A slump in investor confidence was seen last month.
Elsewhere in the single currency area, Italian industrial
orders and sales numbers are published.
US housing starts will be watched as a guide to the health of 
the housing market and construction industry. Meanwhile,
weekly Redbook and ICSC store chain sales will give a
handle on consumer spending patterns.
Central bank committees in both Hungary and Turkey meet
to determine monetary policy.
Wednesday
Japan publishes its monthly trade report early Wednesday
morning. Markit’s PMI™ manufacturing survey showed new
export business falling for the sixth successive month in Markit Economic Research
August, with respondents attributing this to ongoing yen
strength and subdued demand from China.  
What PMI panellists in Japan linked the fall in exports to..
Source: Markit. Size of words linked to number of times cited by companies.
The minutes from the Bank  of England’s Monetary Policy 
Committee (MPC) August meeting will be eagerly awaited for 
signs that the MPC moved closer to voting for another round
of asset purchases. Public sector borrowing numbers will
highlight whether the government is on track to meet its
deficit reduction target. The government will want a repeat of
the big fall in public sector borrowing recorded in July, but
weaker-than-expected economic growth points to a growing
risk that the target will be missed.
In the US, weekly MBA mortgage applications are released
ahead of existing home sales numbers and the Federal Open 
Market Committee (FOMC) interest rate announcement. 
Despite the clamour for looser policy, the Fed is unlikely to 
announce a third round of asset purchases, known as QE3, 
next week. The Czech National Bank also meets to discuss
monetary policy.  
Thursday
Markit and HSBC publish the Flash China Manufacturing
PMI™ early Thursday morning. Analysts will watch these
numbers closely after business conditions deteriorated for a
second successive month in August.

   All eyes will then be on the publication of the flash PMI™
surveys for France, Germany and the euro currency area as
a whole. August’s Eurozone PMI survey pointed to the
slowest rate of economic growth for two years, as the
region’s recovery almost ground to a halt. The risk of the
Eurozone slipping back into contraction has therefore risen.
September data will round off the Q3 picture. Additionally,
industrial orders and consumer confidence numbers for the
Eurozone are published, while the Confederation of British
Industry (CBI) releases industrial trends data for the UK.
In the US, weekly jobless claims (both initial and continued)
and the Federal Housing Finance Agency (FHFA) house
price index are published.  
Friday 
The week ends on a relatively quiet note, with the publication
of French consumer confidence and business climate data in
advance of Italian trade and retail sales numbers.

NOTE : 1) FOMC is unlikely to make announcement and is likely to
disappoint market. 2) Expect advance declaration by some companies.

US employment, Ind. production, PMI charts speak all

Quarterly growth of real GDP and real GDI, quoted at an annual rate, 2006:Q1-2011:Q2.

There has been growth in Vehicle sales






The 2 chart are better indicators of the

The 69 % Brits are Pessimistic about the Next 12 months

The Britain's House hold are negative about the coming Year.
In the recent Survey, conducted by the Markit, when asked, ' How do you think your Household's financial situation will have changed 12 months from now?
About 69% said it should be worst than present.

 Households are more downbeat about the UK economic outlook in August than was reported last month. Exactly 69% of British households anticipate worse economic conditions in one year’s time, up from 61.6% in July. Just 15.2% of respondents expect conditions to improve, down from 19.3% in July. Scotland is the most pessimistic region, while the East of England is the least downbeat. London saw the sharpest deterioration in sentiment (net balance down from -33.4% to -60.0% in August).


Makit is an agency, which carries Economic survey's in many countries. The Purchase Managers Index, popularly known as PMI for Services and Industry. In India, Markit-HSBC conduct the PMI Survey. The survey is credited with a reference by the Reserve Bank of India, and is looked upon by the Equity Market Participants.

Flash PMI China Falls, Europe stumbles

Flash PMI™ survey data released today showed Chinese manufacturing production falling for the second successive month during August. However, the rate of decline in factory output eased compared with July, with the PMI Output Index climbing from 48.0 to 49.4. 
The easing in growth was not broad-based, however, with differing performance by company size. The slower contraction of production reflected renewed growth at smaller manufacturers, where production rose for the first time in three months. 


In contrast, large firms recorded the sharpest decline in output for 15 months. 


This represents a turnaround compared to earlier in the year, when larger companies had generally outperformed smaller firms.




Euro Zone Resilient or Stagnates..? 

The Markit Flash Eurozone PMI Composite Output Index, based on around 85% of usual monthly replies, was unchanged at 51.1 in August. 


The latest reading signalled a rate of increase identical to July’s twenty-two month low and a further near-stagnation of private sector output.

Bernanke's Put, European PMI/Debts, Anna Hazare

Goldman Sachs has down graded the Growth prospect for US in Q3 and Q4. The head line news shall rumble as week is entered.

 Anna Hazare's Agitation now elapses a week. The Gritty man and his millions of agitators shall be entering into a crucial phase. The Indian government has barricaded itself with ' Standing Committee' and the Equity markets have been silent watcher or has yet react. It is expected that, Congress who has no political leadership, will find the situation intolerable. The deterioration of Anna's health or that of any other activist, may cause ' Ripples' and cause Infectious consequences. The Parliament is likely to Buzz, the mammoth human rally, across the Length and Breadth of the nation. The Government seems to have ignoring the issue and the costs may rise. The Uncertainty may chase the market and business sentiment. 

Recession Crusader 

Bernanke's Put and Jackson Hole : In the FOMC minutes, FED had immensely elaborated the its options and Mr Bernanke exercised, ' PUT '. The occasion shall be an ideal place to respond the 3 Wise man, who voted against the decision, in last Meet. 2) Mr. Bernanke is likely to Explain the Utility of the ' Declaration of Mid 2013' and may be explicit about the Intentions, of accommodative Policies. 

French- German finance Ministers, shall be meeting on the Tuesday to further shape up the Merkel-Sarkozy accord and its efficacy. European Bank and Its Stake holders appear to have been loosing ' patience' and insecure.


The Flash P.M.I. Survey's may add some ' Glucose' in the early part of the week, on Tuesday

US Data : Economic reports in the coming week include new-home sales Monday, durable goods Wednesday, and weekly jobless claims Thursday. A second reading on second quarter GDP is released Friday, as is consumer sentiment for August.


The end of month data may mixed and markets are likely to reach in oversold zone. 


Its anticipated that, the early part of the week shall remain Weak and Week end GDP nos shall be  a threat. 
Expecting a ' Squeeze Rally ' in between as relief rally.  


My Note : I remain preoccupied with world moving around and making me restless and uneasy. My animal sense is smelling a ' tragedy' in India. 

China in whirlpool and Lead footing growth

The Markit  Reports :  PMI data suggest industrial production growth has further to fall

 .. Weaker price pressures likely in H2 2011

Latest data from the National Bureau of Statistics (NBS) show industrial output growth easing from an annual rate of 15.1% to 14.0% in July. The slowdown in part reflects monetary tightening by the authorities in a bid to curb inflation. Although it is clear that the current cycle of interest rate and reserve ratio hikes is having the desired cooling effect on growth, the same cannot be said for inflation. Consumer price inflation hit 6.5% in July, the steepest pace for 37 months.
However, HSBC PMI™ survey data, compiled by Markit, show that policy tightening may be having an even greater effect, which is yet to feed through to official production and inflation numbers.

Electricity Consumption tapers.... A lagging Indicator of Slow down


Like the PMI™, electricity consumption also suggests that economic growth may have slowed sharply in recent months, and more so than the official industrial production data suggest (note that the PMI and electricity consumption have followed similar trends so far this year and both contrast with official production data).
                               Choking of Export and Import

The latest PMI™ survey findings also show new export orders falling in China for a third successive month during July. Growth of new export orders soared towards the start of 2010 according to both the official data and PMI series, with the latter depicting a gradual easing in the underlying trend in growth since then.

The pace of import growth has also come off the boil since the start of the year, with the PMI™ Quantity of Purchases Index – measuring the amount of semi-manufactured goods and raw materials acquired by manufacturers – signalling a second successive month-on-month decline in purchasing activity (in line with lower output requirements). As a result, firms reduced their stocks of purchases at the fastest rate for 28 months during July.

                                   Has inflation peaked?
A moderation in the demand for inputs has meant that suppliers have been increasingly unable to push up the prices they charge manufacturers for inputs. This, coupled with recent steep falls in commodity prices and a higher base effect, augers well for consumer price inflation, with the PMI™ Suppliers’ Delivery Times Index consistent with an easing in the headline rate of inflation going forward. The index has acted as a good leading indicator of consumer price inflation