China NBS Manufacturing and Non-Manufacturing PMIs (Oct): Disappointments rock AUD

The official Non-Manufacturing PMI and the Manufacturing Purchasing Managers Index PMIs have been released as follows:

• China October official services PMI falls to 48.7 vs 50.6 in September.
• China October official composite PMI 49.0.
• China October official manufacturing PMI at 49.2 (Reuters poll 50.0) vs 50.1 in September.

AUD/USD update

The price was stationary on domestic Retail Sales in line with expectations. However, there was a move at the turn of the hour which took the price to a fresh session high, well and truly closing the opening gap before the Chinese data was released to 0.6418.

However, we have seen a sharp drop in the data and it is also worth noting that Hang Seng China Index is heading for its lowest since 2005.

AUD/USD is under pressure in the red to 0.6405 with the day's lows eyed: 

Why the data matters to traders

The monthly manufacturing PMI is released by China Federation of Logistics and Purchasing (CFLP) on the last day of every month. The official PMI is released before the Caixin Manufacturing PMI, which makes it even more of a leading indicator, highlighting the health of the manufacturing sector, considered as the backbone of the Chinese economy. The data is of high relevance for the financial markets throughout several asset classes, given China’s influence on the global economy.

China Federation of Logistics and Purchasing (CFLP) publishes the non-manufacturing PMI on a monthly basis. The gauge highlights the performance of China’s service sector, which has a significant impact on the global FX market, given the size of the Chinese economy. An expansion in the Chinese service sector activity points to signs of economic improvement and vice-versa.