So far the July PMIs from China have been disappointing:
- China official July Manufacturing PMI 49.3 (vs. expected 49.2) & Services 51.5
- China's Caixin Manufacturing PMI dropped into contraction July - stimulus hope remains
Heading into this week UBS highlighted the Caixin Service PMI as one to watch.
Asking, Will Chinese services activity services data help bring forward stimulus?
And answering:
- The nation’s Politburo hinted at the potential for more measures to boost spending on “bigticket” items like autos, electronic goods, and home appliances was highlighted, along with further support for service consumption.
- In our view more detail on stimulus is now needed.
- A weak reading from the Caixin Services Purchasing Managers’ Index for July would further underline the need for more action to support growth.
I suspect it will be a weak reading if what we've had so far this week for July PMIs is any guide.
The data is due Thursday:
