China services PMI from Caixin/Markit: 51.8 in January (vs 52.5 Dec)
|The January China services PMI from Caixin/Markit came out at 51.8. The consensus was 52.0 vs 52.5 in Dec. However, the survey was conducted too early to capture the acceleration of the Wuhan coronavirus outbreak.
Growth in China's services sector slowed for a second straight month in January, a traditionally busy sales season, hitting a three-month low as companies cut prices and new orders dipped, a private sector survey showed on Wednesday.
Caixin's composite manufacturing and services PMI, also released on Wednesday, slowed to 51.9 in January from 52.6 in December.
China services
- 51.8 vs 52.6 expected and vs 52.5 Dec.
This data is still higher than an 8-month low hit in October but it is evident that the sector still faces persistent challenges despite a flurry of stimulus and a US-China trade "Phase 1" deal.
FX implications
AUD/USD has taken its cues from the Reserve Bank of Australia in the main. There is a support structure in 0.6707 in AUD/USD to target following the 28th Jan range's 61.8% Fibonacci retracement target being hit on the RBA. As for AUD/JPY, a re-run of 72 the figure at the next breakdown in fickle sentiment could be on the cards. For now, the bulls eye a correction back to the 74 handle to complete a 38.2% Fibo retracement. A 50% mean reversion opens the mid-74.00s.
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