Japanese markets rebounds strongly today, following US and shrugging off the quarterly Tankan survey. At the time of writing Nikkei is trading over 300pts up, or 1.7%. That followed the rebound in US overnight where DJIA closed up 235.57 pts or 1.47%. S&P 500 closed reclaimed 1900 handle and closed up 35.94 pts, or 1.91%. Yen is staying in range again other major currencies in general. The Tankan large manufacturers index dropped more than expected by 3 pts to 12 in Q3 while the outlook gauge dropped 6 pts to 10. The non-manufacturing index, on the other hand rose 2 pts to 25 and beat expectation while outlook gauge dropped to 9. All industry capex showed 10.9% growth during the period. Some economists noted that the Q3 survey showed general pessimistic sentiment but there are still some hopes from construction spending. Some expected the government to push BoJ harder for expanding monetary easing.
Released from China, the official PMI manufacturing index rose slightly to 49.8 in September. Official non-manufacturing PMI was unchanged at 53.4. The Caixin manufacturing PMI was revised higher to 47.2, the lowest reading since March 2009, while Caixin services PMI dropped to 50.5. Caixin noted that "the industry has reached a crucial stage in its structural transformation." And, "tepid demand is a main factor behind the oversupply of manufacturing and why it has not recovered."
IMF chief Christine Lagarde said that "global growth will likely be weaker this year than last, with only a modest acceleration expected in 2016." The anticipated rate hike by Fed and slowdown in China "are contributing to uncertainty and higher market volatility". She also noted that emerging economies are likely to see the fifth consecutive year of decline growth rate. Meanwhile, there would be a "prolonged period" of low commodity prices and she urged emerging markets to diversify their investments.
Looking ahead, PMI data are the main focus today. Swiss will release SVME PMI and retail sales. Eurozone will release PMI final. UK will also release manufacturing PMI. From US, main focus is on ISM manufacturing while jobless claims and construction spending will also be featured.