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The indicator of Chinese manufacturers' activity is still steady in April
The indicator of Chinese manufacturers' activity is still steady. It’s due to the fact the service sector has been expanding for the second month in a row in April.
In April, the index of business activity of the manufacturing sector in this Asian country turned to be 51.4 versus the forecast of leading market experts, who hoped for 51.3. Nevertheless, the figure was below 51.5 – the outcome of the previous month. Besides this, the non-manufacturing activity index managed to tack on to 54.8 in April versus March’ result of 54.6. That’s what the China Bureau of Statistics informed. By the way, it should be noted that the value above 50 drops a hint at an increase. On the contrary, the reading below 50 stands for quite negative dynamics.
Sustained productivity can help to soothe concerns expressed by China's top leadership the previous week that the Chinese economy could slow down more abruptly than anticipated, considering the constant tension in the trade.
Some market experts pointed out that the given figures appear to be solid enough. They added that today’s data openly suggests that surge rates are still upbeat, although risks are over there.
The indicator of new export orders headed south to about 50.7 versus an outcome of 51.3. However, in the last few months it remained generally intact. New orders also inched down to 52.9 from 53.3.
Prices for finished products moderately dived to 53. The stocks of finished products, raw materials, backlogs as well as employment remained in line with previous indications.
The Chinese economy is currently facing a slight downward pressure. That’s what Zhou Hao, economist at Commerzbank AG in Singapore told. Apparently, many recent macro data demonstrate a minor downward trend, although overall PMI turns to be stable.
US Advance quarterly GDP is announced on April 29 at 15:30 MT time.
The US dollar is heading for the best week in three. The market sentiment is mixed as optimism about the global economic recovery was outshined by increasing tensions between the West and China.
The Reserve Bank of Australia (RBA) will hold a meeting and announce changes to the monetary policy on August 3, at 07:30 MT time (GMT+3).
What events to follow and how to trade during the week of July 2-6?
EUR/USD retraced to 1.1870 after breaking out this level. It should be just a natural sell-off ahead of the further rally up.