HSBC Flash PMI hints at rebound

Survey results indicate that the Chinese manufacturing sector is at the onset of a rebound, suggesting the government’s expansionary policies may be paying off, Financial Times reported. HSBC said it expects its purchasing managers’ index for July to increase to a five-month high of 49.5, above its reading of 48.2 last month though still indicating a slight contraction in activity. “The below-50 July reading implied demand still remaining weak and employment under increasing pressure,” said Qu Hongbin, head of Asian research at HSBC. The reading helped temporarily buoy the value of the yuan on Tuesday afternoon. The currency touched 6.3930 on Tuesday morning, a ten-month low, after the Chinese central bank set its daily midpoint at 6.3339, the lowest level in 2012. The yuan has fallen 1.4% against the dollar this year, though traders point out that it has more closely tracked a broader basket of currencies including the euro.