When are China’s official PMI data and how could they affect AUD/USD?

Early on Thursday, China Federation of Logistic and Purchasing will release October month’s official Purchasing Managers’ Index (PMI) numbers around 12 pm Sydney/01 am GMT. Considering the high importance that the catalyst carries for the AUD/USD pair, considering the fact that China is Australia’s largest customer, traders will be keenly observant of the outcome for fresh Aussie moves.

Expectations favor a mild improvement in the Chinese data with the NBS Manufacturing PMI likely being unchanged at 49.8 while Non-Manufacturing PMI is expected to rise from 53.7 to 53.9.

Westpac anticipates no major change in data as its latest report says:

China’s official Oct manufacturing and services PMIs are seen at 49.8 and 53.6 respectively (12pm Syd/9am local).

On the other hand, TD Securities provide details while saying:

We expect China's official manufacturing PMI to edge higher to 49.9 in October from 49.8 previously. The US-China trade ceasefire will have helped to put a floor under the PMIs. China appears to have opened the credit taps further over recent weeks, with monetary aggregates accelerating, giving more support to manufacturers via easing liquidity pressures. Finally, although the CNY has strengthened vs. USD it has weakened to multi-year lows on a trade-weighted basis (CFETS), a factor that will provide another source of relief to manufacturers.

How could they affect AUD/USD?

Considering the recently upbeat data from Australia following the Reserve Bank of Australia (RBA) Governor Philip Lowe’s hawkish statements, Aussie buyers will look for a manufacturing PMI reading above 50.00 mark to stay positive. In the absence of which sellers will highlight doubts concerning the trade deal between the United States (US) and China to trim the latest gains.

Technically, July 10 low of 0.6910 holds the gate for the AUD/USD pair’s further run-up towards a 200-day Simple Moving Average (EMA) level of 0.6957. However, a sustained downside below 0.6900 could keep last week’s top of 0.6885 and the 100-day SMA level of 0.6850 on the sellers’ watch-list.

Key Notes

AUD/USD pulls back from three-month high ahead of Aussie Building Permits, China PMI

AUD/USD Analysis: at fresh October highs ahead of critical Chinese data

About the China NBS Manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI) released by the China Federation of Logistics and Purchasing (CFLP) studies business conditions in the Chinese manufacturing sector. Any reading above 50 signals expansion, while a reading under 50 shows contraction. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market.

About the China Non-Manufacturing PMI

The official non-manufacturing PMI, released by China Federation of Logistics and Purchasing (CFLP), is based on a survey of about 1,200 companies covering 27 industries including construction, transport and telecommunications. It's the level of a diffusion index based on surveyed purchasing managers in the services industry and if it's above 50.0 indicates industry expansion, below indicates contraction.