China's Caixin 54.8 vs 54.0 in August, recovery extends

Ross J Burland FXStreet

Mainland China markets reopened today, having been closed since 30 September.

The September Caixin/Markit services PMI has been released as follows:

China's Caixin 54.8 vs 54.0 in August

''The recovery in China's service sector activity extended into a fifth straight month in September, an industry survey showed on Friday, with hiring increasing for the second month in a row,'' Reuters explained, adding:

''The Caixin/Markit services Purchasing Managers' Index (PMI) rose to 54.8 from August's 54.0, the highest reading since June and staying well above the 50-mark that separates monthly growth from contraction.''

''The services sector, which accounts for about 60% of the economy and half of urban jobs, had initially been slower to return to growth than large manufacturers, but the recovery has gathered pace in recent months as COVID-19 restrictions on public gatherings lifted.''

AUD/USD update

AUD was unchanged on the data, at 0.7177 at the time of writing.

However, the bulls have been resilient to ongoing uncertainty and despite the likelihood of the Reserve Bank of Australia dropping a more dovish tone in the last meeting.

The Governor’s statement signalled the likelihood of an imminent move and of greatest significance was the clear message in the statement:

“The Board continues to consider how additional monetary easing could support jobs as the economy opens up further”.

All eyes are November's meeting which could equate to softness in the currency.

Description of the Caixin Services PMI™

The Caixin Services PMI™, released by Markit Economics, is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private service sector companies. The panel has been carefully selected to accurately replicate the true structure of the services economy.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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