Market Outlook - China's Manufacturing PMI Shows Signs of Improvement Potential

According to Lynn Song from ING, China's official manufacturing PMI has expanded for the first time since April, surpassing expectations and providing a reason for optimism. Song noted that the October value of 50.1 indicates the slightest possible expansion for the PMI, but challenged expectations that a contraction would continue. She emphasized that this suggests the slight recovery seen in industrial production in September could continue. The data highlighted signs of gradual internal improvement, with the production index at its highest level in six months and new orders breaking the series of contraction. However, Song pointed out that new export orders continue to decline, which may indicate weak external demand. She stated, "We will need to see if the implementation of incentives to offset the potential weakening of external demand, which could worsen with Trump's victory and tariff increases, leads to a recovery in domestic demand."