China's Factory Activity Growth Expected to Slow Further in October

Forex News

China will release the official PMI survey on October 31, along with a similar official survey on services. The private Caixin manufacturing PMI will be published on November 1. China’s services PMI will be published on November 5. Analysts expect further slowdown of the China’s factory activity growth in October, as domestic demand faltered and exporters felt a bigger sting from an intensifying trade war with the United States.

According to the forecasts, the official manufacturing Purchasing Managers' Index (PMI) will fall to 50.6 in October, down from 50.8 in September, and marked the lowest level since February.

The private Caixin/Markit Manufacturing Purchasing Managers' index, which focuses more on small and mid-sized firms, is expected to have dipped slightly to 49.9 in October from 50.0 in September. The 50-mark divides expansion from contraction on a monthly basis.

Such downbeat readings would signal a further loss of momentum in the world's second-largest economy. The China’s economy grew by 6.5% in the third quarter, its weakest pace since the global financial crisis.

Economists expect Beijing will roll out more support measures in coming months, with more cuts in banks' reserve requirement ratio (RRR) expected next year. Earlier, the People’s Bank of China cut the amount of cash that banks must hold as reserves for the fourth time this year, stepping up moves to lower financing costs and pledged more support to private firms, a key source of jobs.