China’s
economic activity is showing signs of recovery from of the Covid-19 crash in
June, as both manufacturing and services improved, through external demand
remains weak.
Manufacturing
PMI soared to 50.9 in June from 50.6 in May, while analysts predicted a retreat
to 50.4. The services measure surged to 54.4, compared to both prior and
predicted readings of 53.6 and 53.3 respectively.
Today’s
readings indicated the fourth consecutive modest expansion after China exited
lockdowns in January and February.
The
sub-index of new export orders rose to 42.6, but it is still in the contraction
zone, where the manufacturing employment index dipped to 49.1, reflecting that
the sector shed jobs this month.
While
there is an overall progress from Chinese economy, it is still premature to predict
stronger recovery in the coming period as several global economies, including the
U.S., are struggling to contain the disease.
The U.S. dollar slipped
for a second straight session versus the offshore yuan to 7.0720, ahead
of Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Steven
Mnuchin testimony before the House Financial Services Committee later in the day.
