China NBS Non-Manufacturing PMI came in at 50.1, above forecasts (49.5) in May 🔗 Source 💡 DMK Insight China’s Non-Manufacturing PMI hitting 50.1 is a key indicator for traders: This figure not only beats forecasts but also signals a potential rebound in the services sector, which is crucial for China’s economic recovery. For traders, this could mean increased demand for commodities and currencies linked to Chinese growth, particularly the Australian dollar and various Asian markets. If this trend continues, we might see a shift in market sentiment, pushing investors towards riskier assets. But here’s the flip side: while a PMI above 50 suggests expansion, it’s just above the threshold, indicating that growth isn’t robust. Traders should keep an eye on subsequent data releases for confirmation of a sustained recovery. Watch for any shifts in the USD/CNY pair, as a stronger yuan could impact global trade dynamics. Key levels to monitor are the 50.5 mark for further confirmation of growth and the 49.5 level as a potential support if sentiment shifts. 📮 Takeaway Watch the 50.5 level in China’s PMI for signs of sustained growth; a break above could boost risk assets, especially AUD and Asian equities.

China NBS Manufacturing PMI meets forecasts (50) in May 🔗 Source 💡 DMK Insight China’s Manufacturing PMI hitting 50 is a double-edged sword for traders right now. On one hand, meeting forecasts suggests stability in the manufacturing sector, which could bolster risk appetite among investors. However, a PMI at 50 indicates stagnation rather than growth, raising concerns about the broader economic recovery. Traders should be cautious; while this number might initially support the yuan and related assets, the lack of expansion could lead to volatility if subsequent data disappoints. Watch for reactions in commodities and equities, especially those tied to Chinese demand. If the PMI trends lower in future reports, it could trigger a sell-off in sectors reliant on Chinese manufacturing. Keep an eye on the daily charts for the yuan and commodities like copper, which often react to Chinese economic indicators. A break below key support levels in these assets could signal deeper issues in the market. The real story is whether this stability can translate into sustained growth, or if it’s just a temporary pause before further declines. 📮 Takeaway Monitor the yuan and commodities closely; a break below key support levels could signal deeper economic concerns if future PMIs trend lower.

MON: Global Manufacturing Final PMIs (May), South Korean Balance of Trade (May), German Retail Sales (Apr), Swiss Retail Sales (Apr), GDP (Q1), EZ Unemployment Rate (Apr), US ISM Manufacturing (May)TUE: NBP Policy Announcement (Jun), South Korean CPI (May), EZ HICP (May), JOLTs Job Openings (Apr), RCM/TIPP Economic Optimism, New Zealand Export/Import Prices (Q1)WED: Fed Beige Book, Global Final PMIs (May), Australian GDP (Q1), EZ PPI (Apr), US ADP Employment Change (May), ISM Services PMI (May), Factory Orders (Apr)THU: Australian Balance of Trade (Apr), Swedish CPIF (May), Swiss CPI (May), Spanish Industrial Production (Apr), EZ Construction PMI (May), EZ Retail Sales (Apr), US Challenger Layoffs (May), Jobless Claims (May/30)FRI: RBI Policy Announcement (Jun), Japanese Household Spending (Apr), French Balance of Trade (Apr), BoE DMP (May), EZ Employment Change Final (Q1), GDP 3rd Estimate (Q1), Italian Retail Sales (Apr), Canadian Jobs Report (May), US NFP (May)Week AheadUS ISM Manufacturing PMI (MON): As a proxy, S&P Global’s flash manufacturing PMI rose to 55.3 in May (from 54.5), a 48-month high, with the output index also firming to 56.2, its strongest reading in 49 months. Under the bonnet, however, the picture was somewhat nuanced. The marked influx of new orders was again driven predominantly by precautionary stock-building by clients rather than end-demand, and order book growth was purely domestically driven, with goods exports falling again, S&P said. Supply chains deteriorated sharply, with supplier delivery times lengthening to the greatest degree since August 2022 as war-related shipping disruptions compounded existing tariff-related constraints; input purchases rose at the steepest rate since April 2022, driving inventories higher. Input cost inflation registered its largest monthly increase since June 2022, with selling prices rising at the fastest pace since September 2022. On the labour front, manufacturing payrolls posted their largest increase in 11 months as factories hired to meet the order upturn. Looking ahead, manufacturer sentiment improved to its most optimistic since February 2025, buoyed by the recent order strength and anticipation of tariff-related reshoring, though the reliance on precautionary stocking as a demand driver remains a key caveat.EZ HICP (TUE): April’s HICP was a little hotter-than-expected at a headline level at 3.0% Y/Y, while the Services figure moderated to 3.0% (prev. 3.2%) and the bulk of price pressures remained confined to energy. No real reaction to the data, which didn’t change the narrative into the ECB announcement a few hours later. For May, metrics from France, Germany, Italy and Spain point to a headline figure broadly in-line or slightly cooler than the prior, and pertinently, the transmission of price pressures from energy to broader areas of the economy remains relatively contained. Nonetheless, another 3.0% Y/Y print, or even a slight moderation, will not divert the narrative from an ECB hike in June.US ISM Services PMI (WED): Using the S&P Global data as a guide, flash services business activity index slipped to 50.9 in May (from 51.0), a two-month low, pointing to a services sector that continues to struggle for traction. New business inflows rose only modestly, improving marginally on the slight decline seen in April but remaining consistent with the weakest quarterly performance since late 2023. S&P said export demand deteriorated sharply, with service exports falling at the sharpest rate in six years, while consumer-facing businesses reported particularly subdued conditions amid rising prices and elevated uncertainty linked to the ongoing Middle East conflict. On inflation, services input prices accelerated to the steepest in a year, contributing to a further rise in composite selling prices to their highest since August 2022, which S&P said was a key drag on demand. The labour picture was notably weak: service sector jobs were cut at the second-fastest pace since May 2020, surpassed only by April 2024. Business optimism deteriorated further, with service sector expectations for the year ahead falling to their weakest since April 2025 and second lowest since October 2022, with firms citing surging prices, higher interest rates, and heightened political uncertainty as the principal headwinds.Swedish CPIF (THU): Swedish CPIF is expected to rise 0.6% M/M (and 1.2% Y/Y) in May, whilst the core metrics are expected to rise 0.4% M/M (and 0.2% Y/Y). For the core metrics, the M/M is expected to rise in-line with the Riksbank’s own view, but at a slower pace on a Y/Y basis. Recent surges in energy prices are expected to passthrough into the headline figures, with SEB continuing to expect “some upward pressure on CPIF-XE from the Iran war”. The implication on the Riksbank is expected to muted, as the Bank pointed towards a “wait and see” approach. There are two-sided risks for policymakers, with a material rise in inflation potentially bringing a hike to the table, whilst persistently low inflation (should the conflict resolve), could see policymakers begin to weigh a cut. For the time being, the Riksbank will await further inflation developments, as such, this report is unlikely to have a material impact on near-term policy.Swiss CPI (THU): April’s release was in-line at 0.6% Y/Y, and while the M/M ticked up to 0.3% (prev. 0.2%), it was cooler than the 0.4% consensus. Unsurprisingly, the relative pressures were driven by elevated prices for petrol, diesel and heating oil. For May, the narrative will likely remain the same, and while the SNB will be attentive to any further upside, the inflation level remains in the lower half of the 0-2% target band, and the SNB continues to make clear that inflation meets their medium-term stability objective. As such, policy is expected to remain at the ZLB for the foreseeable.RBI Policy Announcement (FRI): Expected to maintain rates at 5.25%, though there are some outside calls for a hike. The April decision to maintain policy was unanimous, with a neutral stance also maintained; note, we saw external member Singh switch view from accommodative to neutral, falling in-line with the rest of the MPC. During the last address, Governor Malhotra said that global growth faces downside risk and the global economy is facing unprecedented challenges. April’s CPI came in cooler-than-expected but did tick up slightly from