With the first official data of 2019, China's Manufacturing PMI printed below 50 - signaling a contraction - for the second month in a row in January as employment slumped to a multi-year low.

We note that January economic data may be subject to distortion due to the Spring Festival holiday, which starts on Feb 5 this year, 11 days earlier than last year.

Catching down to retail sales inglorious slowdown, China's official manufacturing PMI printed 49.5 in January... near the lowest since Feb 2016

Employment contracted to multi-year lows, Purchase Quantities slipped as did inventories and backlogs as it appears the record-breaking surge in easing did nothing to rejuvenate a struggling manufacturing sector.

Worse still, with Yuan surging to six-month highs, which will do nothing to prompt a renaissance in Chinese exports...

There is a silver lining to the data though as non-manufacturing rebounded from 53.8 to 54.7.

However, both manufacturing and non-manufacturing both saw future expectations notably weaken.

But economists remain hopeful: