Analysts at Danske Bank offered their take on the official Chinese Manufacturing PMI released over the weekend, which showed an unexpected jump in China’s manufacturing activity in November.

“Chinese November PMIs (the official ones) released Saturday were much better than expected. The PMI manufacturing rose from 49.3 to 50.2 (both we and consensus had expected it to stay below the 50 threshold), the highest level since early 2019 although the level remains below the levels in 2017 and 2018. The PMI non-manufacturing index rose to 54.4 from 52.8, the highest since early 2019. Also the private Caixin PMI manufacturing index came out better than expected , basically unchanged at a high level (51.8 versus 51.7 in October). We had expected a decline, as it has painted a very bright picture as of late, so the unchanged print is very positive. Overall, the PMIs support our view that the worst is behind us and China has begun a moderate acceleration supported by stimulus and declining trade war fears . It is good news, as China drives one-third of global GDP growth and Chinese PMIs lead global PMI by a couple of months.”