Making Tracks

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What's going on?

Chinas economic activity roared back like a steam train in March, if Tuesdays survey data is anything to go by.

What does this mean?

The regular surveys which ask purchasing managers how busy theyve been each month showed activity in the countrys manufacturing sector climbing in March, despite economists expectations it would continue to shrink after Februarys record low. And it wasnt just the machines: Chinas non-manufacturing activity unexpectedly perked up last month too.


Despite the improvements, investors praising Chinas economic recovery may be jumping the gun. Remember, these surveys track how busy companies have been partly in anticipation of future demand for their products. In other words, increased activity doesnt necessarily lead to an immediate surge in demand, whether domestic or with many countries still in lockdown and their consumers curbing their spending international.

Why should I care?

For markets: My way or the Huawei.


Chinese telecoms giant Huawei revealed on Tuesday that its 2019 profit hadnt grown by as much as itd promised. That might have something to do with its blacklisting in the US last year, which saw several American companies barred from trading with the firm. If that ban isnt revoked, the company says this year could be its toughest yet. At least Huaweis expecting sales of its smartphones particularly its new 5G-enabled phone to recover as people return to work in China, where it made around 40% of its earnings last year.



The bigger picture: As good as gold oil.


Commodity investors might be relieved when Chinas economy starts firing on all cylinders again too. Chinas the worlds largest oil importer and between the countrys drop in demand and Russia and Saudi Arabias price war, oils price has fallen by its most ever in a single quarter. Investors and oil producers who want that price to rebound might be hoping renewed demand from China will help.

Originally posted as part of the Finimize daily email.

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