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.