China official PMI to tick down in April

The flash reading of the China's HSBC manufacturing PMI dropped further from 49.6 to 49.2 in April, its lowest reading in 12 months. 

Details of the report suggest domestic demand continued to deteriorate after the disappointing March activity data. The official PMI increased in March while the HSBC PMI declined. And the strength in the March officialPMI came from large enterprises while indicators for small- and medium-sized enterprises (SMEs) declined in line with the HSBC report. 

Hence, although the official and HSBC PMIs usually move in tandem, the divergent performance between large enterprises and SMEs will probably lead to slightly different results.

Therefore, Societe Generale expects the official PMI to decline slightly less than the HSBC PMI in April by just 0.1 to 50.