China’s March factory activity shrinks for the fourth month

China’s March factory activity shrinks for the fourth month

In China, in March, factory activity tumbled for a fourth straight month, in a sign that the Chinese economy is still losing steam. It contributed to fears about faltering global surge.

A dismal outcome, coming on the heels of the steepest dive in industrial gain for 7 years, would underline the necessity of greater stimulus as the Chinese government struggles to fix the national economy and resolve a bruising trade conflict with America.

The official Purchasing Managers' Index hit 49.5, soaring a bit from February's outcome of 49.2, although still below the 50 mark, which separates contraction from expansion on a monthly basis.    

In March, seasonal factors probably drove the uptick in the factory indicator because factories increased activity after last month’s long Lunar New Year holidays. Besides this, some steel mills have also began to ramp up output as winter smog restrictions are over.

While weakness in the headline result is generally anticipated, policymakers and traders will probably focus on whether there’s any improvement in domestic orders responding to a series of surge boosting measures for the last time.

Export orders will probably stay weak because China's trade-oriented neighbors, including South Korea, Taiwan, and Japan have all faced decelerating demand.

Tit-for-tat levies slapped by China and America remain in place as they keep negotiating their trade issues. However, with the everlasting trade conflict, which has disrupted the flow of billions of dollars of goods between the two leading economies, no one knows for sure whether an agreement acceptable to the partners can be made or not.

On Wednesday, US statesmen told that China and America have achieved progress in all negotiated areas.

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Market updates on August 15

The risk sentiment remains under pressure after the comments by China about the countermeasures against the US tariffs. Thus, the AUD/USD and the USD/JPY pairs will be under our attention.

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