Hao Zhou, analyst at Commerzbank, notes that stellar performance of Chinese PMIs has caught a lot of attention in the market.

• “After both official and private (Caixin) manufacturing PMIs beat the market expectations earlier this week, the private services PMI released this morning again illustrated a notable rebound in March, bringing the Caixin composite PMI to 52.9 in March (February: 50.7), the highest level since Q1 2018. Overall, all these suggest that Chinese easing measures have been working again.”
• “We would like to put particular focus on the PMIs in the private sector as the Chinese authorities vowed to provide specific support to the private firms amid this easing round. At least for now, the data suggest that the targeted policies towards the SMEs have boosted the business confidence.”
• “Certainly, the pronounced rebound of PMIs points to an improving short-term outlook in China. However, strong headwinds remain and medium-term outlook still looks challenging.”
• “Needless to say, the already elevated debt and financial leveraging will continue to weigh on China’s growth outlook over the medium to long run. As such, we think that the outlook for CNY exchange rates is still cloudy.”