Chinese PMI: positive for risk assets - Danske Bank

According to analysts from Danske Bank, today Chinese PMI add to a picture of a global recovery. They still look for moderation in 2017. 

Key Quotes: 

“Chinese PMI data for October surprised strongly on the upside, adding to the picture of a global recovery and putting more fuel on the reflation theme. China consumes around 50% of global industrial metals and the Chinese strength explains why iron ore prices and other metal prices keep rising.”

“The data are positive for risk assets, as they underpin the picture of a global cyclical  rebound. For bond markets, the data are negative, as they strengthen the reflation case"

“PMIs for the manufacturing sector were the strongest in two years and point to a strengthening of the Chinese recovery into Q4. Our expectation was that growth would stabilise at the Q3 level in Q4 and then gradually moderate in 2017”

“We still look for a moderation in 2017 but the data today suggest the peak will be later and from a higher level. It is difficult to time a cyclical peak and the PMIs suggest that the Chinese recovery is continuing into year-end and that growth is likely to stay strong at the beginning of 2017.”