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China's Manufacturing PMI remains below 50.0 level

Monday, Feb 01 2016
Chinese manufacturers signalled a modest deterioration in operating conditions at the start of 2016, with both output and employment declining at slightly faster rates than in December. Total new business meanwhile fell at the weakest rate in seven months, and despite a faster decline in new export work. Nonetheless, lower production requirements led companies to cut back on their purchasing activity and inventories of inputs. On the prices front, both input costs and output charges fell again in January, though at the weakest rates in seven months. 
At 48.4 in January, the seasonally adjusted Purchasing Managers’ Index remained below the crucial 50.0 value separating growth from contraction for the eleventh successive month. The reading was up slightly from 48.2 in December, and signalled a further modest deterioration in the overall health of China’s manufacturing sector.  
 
China’s official factory gauge signaled a record sixth straight month of deterioration, raising the stakes for policy makers struggling to prop up the economy amid a second bear market in stocks since June and a currency at a five-year low. The purchasing managers index dropped to a three-year low of 49.4 in January, the National Bureau of Statistics said Monday. 
 
Aussie is currently being traded around 0.7080 area. Pair is likely to find support around 0.7040 handle and resistance above 0.7130 level. Later today, in the US session, ISM Manufacturing PMI figures are scheduled for a release.
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