China's manufacturing sector has contracted

The sector has contracted for a fourth consecutive month in April, although the HSBC PMI gauge has edged up to 48.3 from 48 in March. "Domestic demand showed mild improvement and deflationary pressures eased," says HSBC, "but downside risks to growth are still evident as both new export orders and employment contracted." Given China's slowing economy, HSBC believes that the government will add to its recent stimulus.