China's domestic sectors to show resilience

China's flash PMI reports for October will offer a first hint of just how much a toll the slowdown in emerging economies, and not least China, it taking on the real global economy.

Top of the list is the stronger position of the advanced over emerging economies and the better performance of services over manufacturing. This picture is also reflected in employment trends and price trends. It is notable, moreover, that in some emerging economies, such as Russia and Brazil, service output prices appear particularly high consistent with a challenging inflation picture. 

"Finally, the new orders for manufacturing are much weaker for new export orders than overall orders. These trends are consistent with the picture of an overall weak global trade situation but a still relatively resilient domestic consumer, even in China", says Societe Generale. 

No doubt, the lower oil price is a common stabilising factor. Improved credit conditions and the end of austerity are further positives, and notably in the US and Europe. The October PMI data confirms this overall picture.