When are China’s official PMI data and how could they affect AUD/USD?


China Federation of Logistic and Purchasing will release March month’s official PMI  numbers around 01:00 GMT on Tuesday. Aussie traders will be particularly interested in watching how the key activity numbers respond to the latest change in coronavirus shockwave from Australia’s largest customer.

Market consensus signals the headline NBS Manufacturing PMI to pull back to 45.00 from 35.7 while the Non-Manufacturing PMI could also recover from the previous 29.6 to 37.8.

Ahead of the data, TD Securities said:

Following the dramatic decline in China's manufacturing PMI in Feb, some recovery is likely; we expect a bounce, albeit still in contraction, from 35.7 to 42.0 in March. Our rationale is based on an improvement in high frequency indicators and the opening up of a large proportion of Chinese industry. However, a 'V' shape recovery is far from likely as growth in the US and Europe tanks, resulting in at least at 20-30% decline in China's external trade.

On the other hand, analysts at Westpac mentioned:

In China, the market will closely watch the March official manufacturing and non-manufacturing PMIs (12pm Syd/9am local). Both are expected to rebound substantially as conditions gradually revert to their normal trend: consensus is 44.8 on manufacturing (vs 35.7 in Feb) and 42 on non-manufacturing (vs just 29.6 in Feb).

How could they affect AUD/USD?

Not only the Reserve Bank of Australia (RBA) but the Australian diplomats have also shown readiness to take further steps, in addition to the previously announced stimulus and rate cuts, if the situations worsen due to the pandemic. As a result, any more disappointments from the key customer could weigh on the latest recovery while opening the door for further actions from the policymakers.

Technically, 21-day SMA near 0.6200 holds the key to the pair’s run-up towards 0.6330, comprising early-month low. Alternatively, 10-day SMA near 0.5960 could entertain sellers during the pullback.

Key Notes

AUD/USD remains below 0.6200, China Purchasing Managers Index eyed

AUD/USD Forecast: Holding on higher ground, needs to take 0.6200

About the China NBS Manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI) released by the China Federation of Logistics and Purchasing (CFLP) studies business conditions in the Chinese manufacturing sector. Any reading above 50 signals expansion, while a reading under 50 shows contraction. As the Chinese economy has an influence on the global economy, this economic indicator would have an impact on the Forex market.

About the China Non-Manufacturing PMI

The official non-manufacturing PMI, released by the China Federation of Logistics and Purchasing (CFLP), is based on a survey of about 1,200 companies covering 27 industries including construction, transport and telecommunications. It's the level of a diffusion index based on surveyed purchasing managers in the services industry and if it's above 50.0 indicates industry expansion, below indicates contraction.

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