Caixin China Manufacturing PMI 50.7 beats expectations 49.6 and prior 49.4

The Caixin China Manufacturing PMI has been released as follows:

Caixin China Manufacturing PMI

• Caixin China Manufacturing PMI 50.7 beats expectations 49.6 and prior 49.4.

This data follows China's manufacturing Purchasing Managers Index (PMI) which stayed above 50 in May, a bullish input for AUD. 

Market implications

Growth has returned to the manufacturing sector, but new export orders and imports are still in contraction. Overseas demand in a post-COVI-19 world will be low for the forcible future so a recovery in manufacturing and employment in some sectors will remain challenging.

Overall, trade wars are back on the agenda which is not going to be helpful for risk sentiment going forward. In such an environment, the yuan and Aussie can expected to struggle. 

• Chart of the Day: AUD/USD is at make-or-break resistance, 0.6400 or 0.6820

Description of the Caixin China Manufacturing PMI

The Caixin China Manufacturing PMI™, released by Markit Economics, is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private manufacturing sector companies.