The HSBC China service PMI is out and is bad news:
The headline HSBC China Services PMI moderated to 50.7 in May, down from 51.4 in April. Latest data signalled a relatively big drop in the business expectations index, which fell to an 11-month low of 58.1, down from 60.7 in April. Both the new business and outstanding business indices were slightly weaker than April. The employment index, unchanged over the month, remained at a relatively low level. Coming after the stronger Manufacturing PMI reading for May, the slight disappointment in the headline Services PMI suggests that growth momentum remains slow and private sector sentiment is weak. We think policy makers should continue to ease monetary and fiscal policies in the coming months to help support growth.
Chart from markscuttlebutt:
The HSBC composite is better:
More targeted stimulus to come. You gotta ask, though, if weakening property is going to do this to services then rebalancing and 7% growth are clearly mutually exclusive.
