CNY: Mixed PMIs signal two-speed recovery – Danske Bank

💡 DMK Insight

China’s diverging PMIs are a big deal for traders, especially with export orders at play. The official NBS manufacturing index dropping below 50 signals contraction, which could raise concerns about China’s economic health. In contrast, the private RatingDog measure rising above 50 suggests some resilience in certain sectors, likely driven by domestic demand. This divergence could lead to volatility in related markets, particularly commodities and currencies tied to China, like the AUD. Traders should keep an eye on how these indicators influence market sentiment in the coming weeks. Here’s the kicker: while the mainstream narrative might focus solely on the contraction, the uptick in the private measure hints at potential hidden opportunities. If domestic consumption continues to strengthen, it could offset some of the export weaknesses. Watch for key levels in the AUD/USD pair, especially if it reacts to these economic signals. A break above recent highs could indicate a bullish sentiment shift, while a failure to maintain levels could lead to further downside pressure.