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China Beige Book, a survey of more than 3,300 Chinese companies conducted mid-May to mid-June., showed on Wednesday, the economy contracted in Q2 (the three months April to June) from a year earlier.

Additional findings

“Historically low levels of manufacturing profits, capital expenditures and retail sales volumes, barely up from Q1.”

“Slow global demand remains a drag on growth.”

“The eventual return to growth does not mean a return to anything approaching the old levels of growth.”

“Until and unless global demand recovers more forcefully, the incremental quarterly improvement just seen will make for a contraction for full-year 2020.”

Market reaction

The market mood remains cautiously optimistic, as investors weigh in the surge in the new coronavirus cases globally.

AUD/USD trades choppy around 0.6950 so far this Wednesday while USD/JPY consolidates around mid-106s, as the dollar continues to remain on the back foot.