China to Announce Fresh Measures Following PMI Miss

Factory Activity Drops AgainThe latest data out of China overnight has offered little reassurance over the health of the world’s second largest economy. The manufacturing PMI was seen staying in negative territory for a fourth straight month last month. While slightly above forecasts at 49.3 vs 48.9 expected, the data is further evidence of the slowdown in the Chinese factory sector and a worrying indicator of the sluggishness of the overall economy. On the back of the data, the Chinese government has announced that it will hold an emergency press conference in Beijing today to announce fresh measures aimed at restoring and expanding consumption.Fresh Measures ComingChinese authorities have announced a string of measures recently aimed at underpinning the economy and boosting activity. However, with the government so far refraining from a sweeping fiscal stimulus package, efforts have so far proved ineffective. If today’s announcement sees the government launching a large-scale package this would likely help to underpin risk sentiment in a more significant way, driving stocks higher near-term. However, if the measures underwhelm expectations, this might have the opposite impact near-term, leading stocks lower.Technical ViewsNasdaqFor now, the index is stalled at the bull channel top and just ahead of the 16010.4 level. While this region holds as resistance, the index is at risk of printing a lower high, potentially paving the way for a correction lower. 15177.5 will be the initial support level to watch if we turn south form here, a break of which will open the way for a test of deeper support at the 14288.2 level and the bull channel lows.