Business activity rose at the slowest pace in three months.
New orders from overseas rose at the most marked pace since June 2023,
However, lackluster domestic demand led to a modest increase in overall new orders. Overall, new orders rose at a slower pace than in 2023.
Despite the increase in new orders from overseas, business confidence weakened.
Firms reduced staff numbers for the first time since November 2023.
However, input prices increased, leading to an uptick in selling prices.
The figures were significant, with the National People’s Congress opening on Tuesday morning. Despite the better-than-expected Caixin Manufacturing PMI numbers, the service sector PMI raises questions about domestic demand. Importantly, weaker domestic demand warrants further measures to support the economy.
As a result of the softer-than-expected Caixin Services PMI, the Caixin Composite PMI remained unchanged at 52.5. Economists forecast the Caixin Composite PMI to increase from 52.5 to 53.1. In February, the Caixin Manufacturing PMI increased from 50.8 to 50.9.
AUD/USD Has a Mixed Reaction to the PMI Numbers from China
Before the PMI numbers from China, the AUD/USD rose to a high of $0.65113 before falling to a low of $0.65037.
However, in response to the PMI numbers, the Aussie dollar fell from $0.65096 to a low of $0.65037 before steadying.
On Tuesday morning, the AUD/USD was down 0.01% to $0.65072. The AUD/USD avoided a more marked decline as investors awaited updates from the National People’s Congress. In addition to growth forecasts, the markets expect policy measures to support the real estate sector and bolster the economy.
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