China NBS Non-Manufacturing PMI came in at 49.4 below forecasts (50.3) in January

💡 DMK Insight

China’s Non-Manufacturing PMI at 49.4 signals contraction, and here’s why that matters: This figure, falling short of the expected 50.3, indicates a slowdown in the services sector, which is crucial for China’s economic recovery post-COVID. For traders, this could mean a bearish sentiment in related markets, particularly commodities and currencies tied to China, like the Australian dollar. If the trend continues, we might see increased volatility in these assets as investors reassess their positions. Watch for the next PMI release; a sustained decline could trigger further sell-offs. On the flip side, this could present a buying opportunity for those looking at undervalued assets in the long term, especially if the government steps in with stimulus measures. Keep an eye on the 50 level in future PMIs—it’s a psychological barrier that traders often watch closely. If we see a rebound above this level, it could shift sentiment back to bullish for related markets.