China's June Caixin manufacturing PMI came in at 49.4 vs. 50.0 expected and 50.2 last, as modest fall in new work dragged production into contraction.

On Sunday, the purchasing managers' index (PMI) for China's manufacturing sector arrived at 49.4 in June, the same as that seen in May, the National Bureau of Statistics (NBS) reported.

June data highlighted a challenging month for Chinese manufacturers, with trade tensions reportedly causing renewed declines in total sales, export orders and production. Companies responded by reducing headcounts further and making fewer purchases of raw materials and semi-finished items. At the same time, selling prices were raised following another increase in input costs, though rates of inflation were negligible. Business sentiment was broadly neutral at the end of the second quarter, with firms mainly concerned about the US-China trade dispute.

The latest figure was, however, indicative of only a marginal deterioration in operating conditions. Amid reports of trade tensions, total new business and international sales declined at the end of the second quarter. The former contracted for the second time in 2019 so far, albeit moderately. Concurrently, the fall in exports followed from a renewed increase in May.

Source : FXstreet