China's Caixin services PMI unexpectedly drops to 51.1 in October, Aussie unfazed

China's Caixin services PMI for October came in at 51.1 vs. 52.8 expected and 51.3 last, which marked the slowest increase in services activity for eight months.

Meanwhile, the Composite Output Index eased to 52.0 in October from September’s reading of 51.9.

Quotes from Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group:

“The Caixin China General Services Business Activity Index dipped to 51.1 in October from 51.3 in the previous month, marking the slowest expansion in eight months amid subdued market conditions.

1) Demand across the services sector grew at a reduced pace, with the gauge for new business falling to the lowest level since February. The measure for new export business picked up slightly. 2) While the job market expanded at a weaker clip, with the employment gauge falling from the previous month’s recent high, the measure for outstanding business rose further into expansionary territory. This implied a mismatch between labor supply and demand. 3) Both gauges for input costs and prices charged by service providers edged down, but they remained in positive territory, reflecting relatively high pressure on costs, including those of workers, raw materials and fuel. 4) The measure for business expectations dropped to the lowest point in 15 months, indicating depressed business confidence.”

The Aussie held the lower ground near-four-day lows of 0.6877 on the downbeat Chinese Caixin Services PMI data, with all eyes now turning towards the RBA interest rate decision, due at 0330 GMT.