Global manufacturing stabilised in October, ending ongoing decline as trade tensions rose and global growth slowed. However, the manufacturing PMI for developed markets remained firmly below 50 in October, marking the sixth consecutive reading below that threshold.
For emerging markets, things look slightly more upbeat with a PMI of 51, but are still far from exuberant. So where to from here? Based on several indicators like steepened yield curves, rising money supply growth, and easier monetary policy (which macro numbers take time to reflect), the odds are that the Manufacturing PMIs will recover further from here. This could be a swing factor for global earnings as well. Do not expect manufacturing to the main growth-driving force, however, as that would require a material deal on trade.
