When are China’s official PMI data and how could they affect AUD/USD?
China Federation of Logistic and Purchasing will release January month’s official PMI numbers around 02:00 GMT on Friday. Aussie traders will be particularly interested in watching how the key activity numbers respond to the latest coronavirus outbreak. However, the Lunar New Year Holidays might stop the data from offering a clear picture.
Market consensus signals NBS Manufacturing PMI to pull back to 50.00 from 50.2 while the Non-Manufacturing PMI could remain unchanged at 53.5.
Ahead of the data, TD Securities said:
We expect a small increase in China's manufacturing PMI to 50.3 in Jan from 50.2 in Dec 2019. Last month China's manufacturing PMI lagged the rest of Asia, but we expect some catch-up this month. Front-loading ahead of Chinese New Year, the strengthening trade outlook, an improvement in credit conditions, and lending to smaller manufacturers, bodes well for further improvement in manufacturing confidence. It is also likely too early for the impact of coronavirus to have a discernible impact on confidence, but it could weigh on sentiment in the weeks ahead.
On the other hand, analysts at Westpac mentioned:
China's official PMIs for January are likely to point to a continued stabilization of growth, with consensus 50.0 on the manufacturing index and 53.0 on services. Risks of a surprise are sure to the downside. The impact of coronavirus will be closely assessed in the coming months following the end of the lunar new year holidays.
How could they affect AUD/USD?
While the latest inflation and employment data from Australia cut odds favoring the Reserve Bank of Australia’s (RBA) immediate rate cuts, coronavirus fears have weighed on the prospects. Even so, a sustained above 50 activity gauge could keep the Aussie trades mostly positive while an alternative case could take the benefit of doubt amid the on-going holiday season.
Technically, November month low near 0.6755 offers the immediate resistance holding the key for the pair’s fresh recovery targeting 0.6800. Alternatively, October 2019 low near 0.6670 may keep luring the bears.
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About the China NBS Manufacturing PMI
The Manufacturing Purchasing Managers Index (PMI) released by the China Federation of Logistics and Purchasing (CFLP) studies business conditions in the Chinese manufacturing sector. Any reading above 50 signals expansion, while a reading under 50 shows contraction. As the Chinese economy has an influence on the global economy, this economic indicator would have an impact on the Forex market.
About the China Non-Manufacturing PMI
The official non-manufacturing PMI, released by the China Federation of Logistics and Purchasing (CFLP), is based on a survey of about 1,200 companies covering 27 industries including construction, transport and telecommunications. It's the level of a diffusion index based on surveyed purchasing managers in the services industry and if it's above 50.0 indicates industry expansion, below indicates contraction.