Services Sector in China Eases to 51.7 in July

The Caixin China Services PMI unexpectedly fell to 51.7 in July of 2016 from an 11-month high of 52.7 in June and missing expectations of 52.9. Activity and new order slowed while employment fell for the first time in 4 months. The amount of unfinished work declined for the 2nd straight month while efforts to clear backlogs increased. Services companies maintained a positive stance towards future business activity in July, with the degree of optimism edging up to a 3-month high. The Caixin China General Services PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private service sector companies. The index tracks variables such as sales, employment, inventories and prices. A reading above 50 indicates that the services sector is generally expanding and below 50 indicates that it is generally declining.

While still above the 50 mark that demarcates expansion from contraction on a monthly basis, a breakdown of the activity index showed growth momentum was slowing broadly, while employment fell, albeit at a modest rate.

"All of the index categories showed signs of deterioration, with employment falling back into contraction territory after three consecutive months of growth," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group.

Market Snapshot



Opening wrap: The S&P 500 lost 0.64 percent, to 2,157.03 and the Nasdaq Composite fell 0.9 percent, to 5,137.73. The Nikkei was down 1.7 percent after falling more than 2 percent in early afternoon trade. The broader Topix lost 1.7 percent, while the JPX-Nikkei Index 400 was down 2.1 percent. MSCI's broadest index of Asia-Pacific stocks outside Japan fell 1 percent. Shanghai was near flat, with a private survey showing growth in China's services sector cooled in July and companies shed staff for the first time in four months. The Australian index, S&P/ASX 200, fell 1.05 percent.

Currency Markets : Top performer: EUR/NZD. Worst performer: NZD/USD





Treasuries: Top performer: US T-Note 10 YR. Worst performer: Euro Buxi

Opening Wrap: U.S. 30-year yields rose the most among U.S. Treasuries and hit 2.332 percent, their highest since July 21, before pulling back. U.S. 30-year yields were last at 2.300 percent. Benchmark 10-year yields hit a six-day high of 1.573 percent, but were last at 1.544 percent.