When is China's Caixin Manufacturing PMI and how could it affect the AUD/USD?


China Caixin Manufacturing PMI overview

Having witnessed upbeat prints of China’s NBS Manufacturing PMI the previous day, AUD/USD traders eye June month Caixin Manufacturing PMI from the dragon nation for the immediate catalyst. The activity data from Australia’s largest customer, up for publishing at 01:45 GMT on Wednesday, also become important as market reassess risks at the start of the third quarter.

Forecasts suggest another above-50 level of 50.5 versus the 50.7 prior, which in turn could help the RBA to keep its doors closed for negative rates till March 2021, as recently reiterated by Deputy Governor Guy Debelle.

TD Securities anticipate no change in the private activity gauge while saying,

We expect the Caixin manufacturing PMI to remain at 50.7 in June, the same as last month driven by production. This survey is more focused on smaller companies and will likely benefit from the targeted measures that have been aimed at such companies over recent months. After contracting for four straight months, there is a high degree of probability that new orders will move back into expansion driven by domestic demand. However, we expect the export orders component to remain weak amid a deterioration in external demand conditions.

How could it affect the AUD/USD?

Given the recently upbeat data from China, Australia’s largest customer, any more positive news could be welcomed with additional zeal around a five-day top. However, the growing tension between the US and China, coupled with the recent dent in the Canberra-Beijing relations, could cap the pair’s further upside. Also likely to challenge the bulls are the increasing fears of the coronavirus (COVID-19) wave 2.0. As a result, downbeat prints will have a major impact on the pair’s moves than otherwise.

Technically, 21-day SMA and a downward sloping trend line from June 10, respectively around 0.96910 and 0.6925, question the bulls during the pair’s further upside. On the contrary, bears are looking for entries below 0.6850. However, the traders’ mood remains positive unless the quote slips below 200-day SMA, at 0.6668 now.

Key Notes

AUD/USD kick-starts Q3 around 0.6900, eyes China Caixin Manufacturing PMI

AUD/USD Forecast: Holding in range, bulls still surging on dips

About the China Caixin PMI

The Caixin China Manufacturing PMI™ is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private manufacturing sector companies.

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