Official PMIs Print This Sunday, More Uncertainty Around Services Outcome

A reminder that the official China PMIs print this Sunday (the 31st of July). The market expects mixed results. The consensus is for the manufacturing PMI to edge higher to 50.4 from 50.2 last month. The non-manufacturing/services PMI is forecast to ease down to 54.0 from 54.7 last month.

• For the manufacturing PMI, the range of estimates is 49.9 to 51.3, while the range is noticeably wider for the non-manufacturing PMI (51.3 to 54.6).
• This is not surprising given uncertainty as to how the domestic economy is tracking, particularly in the service sectors, given on-going covid related headwinds.
• In Shanghai, metro passenger volumes are still well below earlier 2022 highs, while this metric for Shenzhen has also ticked down towards the end of this month.
• There is also uncertainty as to how mortgage related turmoil and on-going housing weakness will impact broader activity.
• Still, the Standard Chartered China SME survey improved further in July, the headline series rose to 52.2 from 51.7 last month. We are comfortably above the May trough of 48.50.
• Then on Monday, the Caixin manufacturing PMI prints. The market is expecting a 51.5 print, versus 51.7 last month. On Wednesday the Caixin services PMI is forecast to print at 54.0 from 54.5 in June.