China’s Caixin/Markit services PMI: 54.1 vs 56.8 expected

China’s Caixin/Markit services PMI  was expected to remain in good health for July from 58.4 prior. 

The data, however, has arrived as follows:

Caixin/Markit services PMI 

CHINA CAIXIN/IHS MARKIT JULY SERVICES PMI AT 54.1 (VS 58.4 IN JUNE)

Forex reaction

Ahead of the data, China’s onshore spot yuan had strengthens to a high of 6.9602 per dollar in early trade, strongest since March 11.

AUD is muted on the data.  Nore to come…

Details of the report

Resters elaborates on the outcome:

Growth in China’s services sector slowed in July from a decade high the previous month, as new export business fell and job losses continued, an industry survey showed on Wednesday, pointing to cracks in the sector’s post-COVID recovery.

The Caixin/Markit services Purchasing Managers’ Index (PMI) fell to 54.1 from June’s 58.4, which was the highest reading since April 2010. The 50-mark separates growth from contraction on a monthly basis.

The services sector, which accounts for about 60% of the economy and half of the urban jobs, had been slower to recover initially than large manufacturers, but the recovery has gathered pace in recent months as the nationwide COVID-19 restrictions on public gatherings gradually lifted.

However, pressures remain. Heavy job losses, pay cuts and now fresh COVID-19 outbreaks in the country’s west and northeast regions have made some consumers cautious about spending and going out again. 

Key points

More to come

Description Caixin Services PMI

The Caixin Services PMI™, released by Markit Economics, is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private service sector companies. The panel has been carefully selected to accurately replicate the true structure of the services economy.