China's Caixin Services PMI remains in contraction at 41.4 in May, a big miss

China's Caixin services PMI for May arrived at 41.4 vs. 47.3 expected and 36.2 last, showing that the country’s services activity contraction extends.

China’s services activity falls at softer but still at a sharp rate amid COVID-19 restrictions.

Wang Zhe, senior economist at Caixin Insight Group said, “May’s reading was the second-lowest since February 2020 as China’s Covid-19 epidemic still weighed heavily on services activities.”

“Both supply and demand in the services sector shrank further. The services PMI and the gauge for total new business in May both rose from April’s recent lows, but the May readings were still well below 50. That shows local Covid outbreaks were still hurting the services sector. Due to the effects of epidemic control measures, especially travel restrictions, the gauge for new export business remained in negative territory for the fifth straight month,” he added.

AUD/USD unfazed around 0.7200

The below-forecast print of the Chinese Services PMI fails to have any negative impact on the aussie dollar, as AUD/USD keeps its range around 0.7200, down 0.10% on the day.