Well, once again, it seems that those preaching extreme doom and gloom based on crude views of the world have got it wrong. Most of the recent data flows have indicated that neither the Australian nor global economies will be heading anywhere near recession. If this continues, expect to see lots of view-changes, forecast changes, and general ex post facto rationalisation. These data also lend weight to the argument that there was little need for the RBA to impulsively cut rates twice last year.
Contrary to predictions of a big China slowdown that in turn cruels Australia, China's manufacturing PMI has bounced-back into positive territory after a few weak months, with the 50.2 print signalling expansion rather than contraction. The non-manufacturing PMI was even stronger again, printing over 56. Australia's manufacturing PMI yesterday also jumped back up into expansionary land, with a print above 50. Another major Australian trading partner, India, has had its PMI print at 54 plus, which was a multi-month high. And last night we got more positive US and UK news. UBS summarises the data as follows:
* Australasia Data - AU: The PMI rose 2.4pts to 50.2 in Dec, highest level since June.
* US: The manufacturing ISM index rose to six-month high of 53.9 in Dec (mkt: 53.4), from 52.7 in Nov, leaving the ISM consistent with ~4% GDP growth. New orders rose to 57.6 from 56.7, production rose to 59.9 from 56.6, employment increased to 55.1 from 51.8.
* US: Construction spending increased 1.2% (mkt: 0.5%), though this followed a downward revised 0.2% drop in Oct (was +0.8%).
* UK: The manufacturing PMI rose to 49.6 in December, from 47.7, surprising markets on the upside.
