China’s PMIs for December showed growth, the first since September. Both manufacturing PMIs returned to expansion, with the official PMI rising nearly a point to 50.1, surpassing expectations. RatingDog’s PMI also reached 50.1, showing a minor increase.<\/p>\n
The non-manufacturing PMI showed the largest rise, moving up 0.7 points to 50.2. This marked a return to expansion following November’s decline below the neutral mark. The construction sub-index rose 3.2 points to a nine-month high of 52.8, attributed to recent stimulus measures. The services sub-index improved slightly but remained below the neutral mark.<\/p>\n
These results suggest recent support measures are enhancing growth momentum. China is expected to continue with targeted fiscal support and piecemeal monetary easing to boost domestic demand. The Central Economic Work Conference highlighted the priority of supporting domestic demand for 2026. This includes stabilising investment, following a sharp decline in fixed investment in the second half of 2025.<\/p>\n
The December 2025 PMI data showed a positive turn, with both manufacturing and services moving back into expansionary territory for the first time since last September. This suggests that the support measures rolled out in late 2025 are beginning to filter through the economy. For us, this signals a potential, albeit cautious, shift in sentiment towards assets linked to Chinese growth.<\/p>\n
The most notable detail was the construction sub-index, which jumped to a nine-month high, providing a strong tailwind for industrial commodities. We’ve already seen Dalian iron ore futures react this first week of January, rallying over 4% to reclaim the $145 per tonne level. This makes bullish positions, such as buying call options on copper miners and related commodity ETFs, an interesting play for the coming weeks.<\/p>\n
However, the recovery is not yet broad-based, as the core services index remained just below the neutral 50 mark. This suggests that consumer-focused companies may continue to struggle, capping the upside for wider equity indices like the Hang Seng. Considering this, strategies like selling out-of-the-money call spreads on the FXI ETF could be used to benefit from a potentially range-bound market.<\/p>\n
The forward guidance points to more “piecemeal” and “targeted” support, not a massive credit stimulus. This implies the government wants a controlled recovery, which should keep a lid on excessive market volatility compared to the sharp swings we saw during the 2025 property sector concerns. This environment makes selling volatility through options on the offshore yuan (CNH) potentially profitable, as the currency is likely to remain stable.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" China’s PMIs return to expansion in December, signaling improving growth momentum amid supportive fiscal measures.<\/p>\n","protected":false},"author":62,"featured_media":16961,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38626","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t