Caixin PMI Surprises On The Downside, But USD/CNH Spike Above 7.1700 Short Lived

The Caixin manufacturing PMI showed a decent downside surprise for the July print, coming in at 49.2, versus 50.1 expected and 50.5 prior. This ends the recent run of above 50.0 prints and puts the headline index back to January levels from earlier in the year.

• This contrasts with the slightly better than expected outcome for the official manufacturing PMI, which printed yesterday. Still, the level of both indices are now quite close to each other.
• In terms of the detail, the output index fell to 49.2 from 51 in June. New orders were also down versus the prior month.
• The initial market reaction saw USD/CNH spike to session highs of 7.1736, but we now sit lower, back at 7.1670/80, still 0.30% weaker in CNH terms for the session.
• The weaker onshore equity open has given way to more positive trends in recent dealings. HK equities are close to session highs, the HSI up 1%, with the tech index around 2% higher at this stage.