China PMI Data came much better than forecast

China PMI (Purchasing Managers Index) data rose from 49.2 to 50.5, an increase of 1.3 or 2.64%. The forecast was 49.5 and data came much better than forecast. PMI data provides each month with an early indication of economic activities in the Chinese manufacturing sector.

We have seen a smart rally in all base metals last week and that was enough to understand that market player had smelled this in advance. Big players of the market can collect the secret information from various sources and we the small players should guess their move and follow them because we have not many sources like them.

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What is PMI and why it is important for base metals traders?

As I have mentioned above that PMI (Purchasing Managers Index) data is an indication of economic activities in manufacturing sectors and it reflects the health of the country's economy. PMI data reading above 50 is considered as good for the economy and below 50 is considered as bad. Near 50 it can be considered as stable. Since China is the largest consumer of metals, so base metals demand is affected by Chinese manufacturing activities. If Chinese manufacturing sectors health will be good then ultimately demand will rise and also metal's price.

It is important to watch Chinese PMI, CPI data for base metals traders.