News from across the continent
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Publish Date30/12/2012 01:33:33 AM
Last Update02/01/2013 07:22:48 AM
The holiday theme is overshadowing markets again this week with eyes in Asia set on the release of PMI Manufacturing data for December.
The Manufacturing PMI in November showed slight recovery as the index rose marginally to 50.6 levels, which is a positive reading above 50. The recovery is expected to have continued in December and the expansion is expected to accelerate to 51.0 in line with the latest signs of recovery seen.
The recovery in the manufacturing sector supports expectations for recovery in growth rates during this period in general, as well as signs that China is increasing imports of mineral resources in the period ahead and pick up demand for oil. China`s strong move towards growth is a positive signal to welcoming New Year with eyes set on stronger economic growth.
China`s industrial companies` profits in recorded rose in November, supporting expectations for further expansion in the manufacturing sector next month.
Chinese policies are focused on supporting growth to help buoy domestic spending as well as supporting exports, especially after the tightening monetary policy fulfilled the target and anchored inflation rates.
The positive signals from manufacturing sector recovery reflect on the Australian economy; Australia’s mining sector depends heavily on imports from China and a stronger manufacturing sector supports Aussie indeed on prospects for stronger commodities demand.
Nevertheless, the global state remains jittery with the eyes focused on the U.S. economy and whether Washington will strike a deal to skirt the fiscal cliff and the inevitable recession it threatens of. Politicians` inability to reach a deal and the U.S. economy sinking back into recession will surely cut short on any hope for a soon recovery in China, hence further dampen the sluggish global growth!
The U.S. President Barack Obama is supposed to finish debates with the Republican and Democrats to reach an agreement to avoid the “Fiscal Cliff” especially with near deadline for a decision which is the last day of 2012; this will dramatically affect the global economy. Hoping that the crisis will be resolved before the deadline, which will positively affect China`s economy and help the economy continue on the track of recovery.
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