China official PMIs due today - preview
Coming up at 0100 GMT China official PMIs for August
- Manufacturing expected 51.2, prior 51.1
- Non-manufacturing expected 54.2, prior 54.2
- Composite prior 54.1
- Factory activities will still be growing, but at the same speed as last month, while the growth in services may be a little lower. However, there are activities in the services sector that could be an engine for growth in the coming months.
- tourism within China could emerge as a highlight supporting the economy
- other services in the insurance and financial sectors may slow a little
- China's economic recovery continues, albeit it an uninspiring pace, with the August PMIs expected to be only marginally above 50
- manufacturing and non-manufacturing PMIs are both comfortably above the 50 expansion/ contraction threshold
- signalling robust growth is continuing
- Little change from the mildly expansionary readings is expected.
HBSC, not specifically on today's data:
- With an uneven recovery and uncertain global growth, Beijing is focusing on reflating the domestic economy
- We thus expect policy to remain supportive with further interest-rate reductions this year - a 25 basis-point cut in the average reserve-requirement ratio to 9.15% and the one-year loan prime rate trimmed by another 20 points to 3.65%.