Caixin Services PMI Beats, Diverging Further From The Official Print

The Dec Caixin services PMI comfortably beat expectations, rising to 52.9 (51.6 forecast and 51.5 prior). The follows the better than expected Caixin manufacturing PMI from earlier this week, 50.8 against 50.3 forecast.

• For the Caixin services PMI we are still below earlier 2023 highs (57.8), but the trend improvement was evident through the final stages of 2023.
• In terms of the detail, new business activity was supported by consumer spending (Rtrs), while increased foreign travelers to China was also cited as a positive. The employment sub index rebounded to 50.4 from 49.9 in Nov.
• The early 2024 outlook is positive but remains below its long run average (Rtrs). The prices charged component of the index also fell versus Nov levels.
• The result furthers the divergences with the official PMI readings, which lost ground in Dec, particularly in the manufacturing space.
• Analysts note this likely reflects differences in terms of firms covered within the respective PMI releases, with the Caixin PMI tending to be more focused on smaller businesses and in the export sector.
• The market reaction has been fairly muted, with HK and China equities remaining in the red, while USD/CNH dips remain supported.