ABN AMRO’s report discusses expectations for China’s January PMIs, forecasting broad stabilisation. Manufacturing PMIs are predicted to hover around the neutral 50 mark, while the services PMI may decrease but still remain in expansion territory. <\/p>\n
The report advises caution when interpreting Chinese data at this time of year, due to potential distortions caused by the shifting timing of the Lunar New Year holiday. These annual shifts make early-year data less predictable and reliable.<\/p>\n
With China’s January PMI data due shortly, we are bracing for numbers that hover around the 50-point neutral mark, suggesting stabilization. This follows December 2025\u2019s official manufacturing figure which came in at a contractionary 49.7, making this release a crucial indicator for the economy’s direction in early 2026. A flat reading could trap traders, as the real risk lies in a surprise that breaks the market out of its current tight range.<\/p>\n
We must treat any forthcoming data with caution due to the Lunar New Year holiday, which falls later this year on February 17th. Factory shutdowns often begin weeks in advance, meaning the January survey period will capture a distorted view of business activity. This predictable uncertainty is already being reflected in the options market, with implied volatility on the Hang Seng Index ticking up nearly 5% over the past week.<\/p>\n
Given the unreliable nature of the data, we believe positioning for increased volatility is a sound strategy. Buying straddles on major China-focused ETFs allows a trader to profit from a significant price move in either direction, which is a real possibility if the PMI figures deviate sharply from consensus. We remember how the market overreacted to the distorted January 2025 numbers, creating a sharp but short-lived dip that quickly reversed.<\/p>\n
For those holding positions sensitive to Chinese growth, such as in commodity futures like copper or iron ore, hedging seems appropriate. Buying puts can provide cost-effective insurance against a downside shock if the manufacturing sector shows unexpected weakness. Alternatively, the most prudent move may be to wait for a clearer picture to emerge with the combined January-February data release in March.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" ABN AMRO expects stable Chinese PMIs, with caution due to Lunar New Year timing distortions.<\/p>\n","protected":false},"author":62,"featured_media":16966,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40578","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/40578","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=40578"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/40578\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16966"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=40578"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=40578"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=40578"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}