Weakness persists in China's PMIs

China's November Manufacturing PMI fell to 3 year low, at 49.6, slightly lower from that of previous month, indicating a troublesome process of deleveraging in the sector.

The softness is almost across the board, output index dropped by 0.3 pt to 511.9, new orders fell by 0.5 pt to 49.8 and new exports orders declined by 1.0 pt to 46.4. Input prices fell by 3.3 pt to 41.1, with the plunge of commodity prices in November.

Adding to it, November private Caixin PMI is at 48.6, rose from 48.3 of last month. While there is continued improvement seen in the Caixin PMI in last 2 month, it stands way below than the trend level.

"All in all, China's manufacturing sector remains sluggish due to property slowdown. While property prices are turning around led by first-tier cities, the housing investment continues to moderate, reflecting a significant property inventory overhang in the economy", says Commerzbank in a research note.