China official manufacturing PMI data will be released on June 1, along with the official services PMI. The Markit/Caixin factory PMI, a private and separate gauge of manufacturing activity, will also be released on June 1. Markets skeptical as to whether credit-fueled expansion in March and April was short-lived and that a solid recovery in the manufacturing sector has not taken hold.
After slight expansions in the previous two months, data is expected to show that China put an end to two-month expansion and slip into contraction in May. Data could dent market hopes that the world’s second-largest economy is reviving.
The official manufacturing Purchasing Managers’ Index (PMI) is expected to fall to 50.0 from 50.1 in April, according to a median forecast of 31 economists polled. The Caixin PMI, which focuses on smaller companies, is likely to show factory activity shrank for the 15th straight month in May, with the headline PMI seen easing to 49.3 from 49.4 in April.
“With concerns about rising debt, we do not believe we will see massive monetary stimulus. Our view is for a further slowdown in the economy, but not a hard landing. We think China is experiencing an ongoing soft landing”, said Frederik Kunze, an economist at NORD/LB.
The material has been provided by InstaForex Company – www.instaforex.com