The National Bureau of Statistics released the data over the weekend, showing a fall from 52.9 to 48.4 in services PMI. This will add pressure on the PBOC to ease policy further. The internal Chinese economy is obviously slowing down, as was also apparent in last months import data, but the manufacturing sector still seems to be growing slowly according to last week’s PMI.
Overall this data should have no effect on the AUD in the short-term; any PBOC easing would likely be bullish for the AUD yet any signs of a slowing Chinese economy is a negative. Longer term, the signs do seem to be increasing that China has peaked for now at least, and I see no reason to change my medium term bearish AUD strategy.
