FOREX NEWS & BLOG

China Caixin Services PMI for April 2025 is 50.7 (expected 51.7)

China Caixin Services PMI for April 2025 is 50.7 (expected 51.7)

May 6, 2025 4:45 am |

China Caixin Services PMI for April 2025:

Services PMI 50.7, slowest since September 2024

  • expected 51.7, prior 51.9

Composite 51.1

  • prior 51.8

Commentary/analysis, summarised from the report:

  • Growth in business activity and new orders slowed, with the latter rising at its weakest pace since December 2022.

  • Employment contracted for the second month, as firms cut staff to manage costs, leading to higher backlogs.

  • Input costs rose, driven by wages and raw materials, while prices charged fell for the third month, amid weak demand and competition.

  • Market optimism dropped sharply, with future expectations falling to the second-lowest on record, reflecting concerns over U.S. tariffs.

  • Foreign tourism provided some support to export orders, but overall demand remained subdued.

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These are the final of the PMIs due from China for April.

Earlier we’ve had:

China March official Manufacturing PMI 49.0, this is a 16-month low (the worst contraction since December 2023) expected 49.8, prior 50.5

  • Non-Manufacturing PMI 50.4 (services and construction)

China Caixin Manufacturing PMI for April 2025 comes in lower than March but better than expected at 50.4

This article was written by Eamonn Sheridan at www.forexlive.com.

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FOMC preview – “Fed confronts lose-lose scenario amid haphazard tariff rollout”

FOMC preview – “Fed confronts lose-lose scenario amid haphazard tariff rollout”

May 6, 2025 4:37 am |

Timiraos argues that the chaotic implementation of President Trump’s tariff policy is creating a difficult dilemma for the Federal Reserve:

  • either risk a recession or grapple with stagflation.

This policy bind will be a central focus at the Fed’s upcoming two-day meeting, where officials are expected to maintain their cautious stance on interest rate cuts.

  • Fed Chair Jerome Powell and his colleagues are set to reiterate their wait-and-see approach, underscoring their reluctance to ease policy too soon and risk undermining progress on inflation. As Powell put it last month, “We’ll make what will no doubt be a very difficult judgment.”
  • The situation has been likened to a goalkeeper’s dilemma—either stand firm to contain inflation or move quickly to support a weakening economy. But the Fed remains wary of acting pre-emptively, especially with tariffs threatening to raise short-term inflation through supply disruptions.
  • “This is not going to be a cycle where the Fed pre-emptively cuts because there’s a forecast of a slowdown,” said former Fed Vice Chair Richard Clarida, now at Pimco. “They’re going to actually need to see it in the tangible data, in particular the labor market.”

The article is much longer and in depth, if you can access it the link is here.

***

The FOMC statement is due at 1800 GMT on Wednesday, May 7, 2025 91400 US Eastern time)

  • Federal Reserve Chair Powell speaks a half hour later

This article was written by Eamonn Sheridan at www.forexlive.com.

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