China’s faltering economic recovery has once again dominated activity in financial markets, dampening risk sentiment and giving the dollar a broad boost in relatively muted moves after the US July 4 holiday.
The private-sector Caixin/S&P Global services purchasing managers index hit a five-month low in June, reflecting growing vulnerability in a once resilient sector of the massive economy.
The data quickly reversed a day-old bounce in the Chinese yuan, which appeared on Tuesday to have finally paid heed to the central bank’s series of stronger-than-expected midpoint settings and other measures to slow its decline.
Beijing’s export curbs on two widely used metals in semiconductors and electric vehicles continued to dominate headlines, drawing strident commentary in the domestic press just before Treasury Secretary Janet Yellen’s visit to China.
Yet news that Tesla (TSLA) and its main Chinese rival BYD racked up record deliveries of China-made electric vehicles in the second quarter suggests that demand in at least one segment of the economy is alive and well.
The European and UK calendar is dominated by final services and composite PMIs for June, also expected to confirm a slowing in what has been a consumption-led economic recovery.
The US is due to release factory orders for May, but the focus will of course be on the minutes of the Federal Reserve’s June meeting, which resulted in a pause in tightening while adding two more rate hikes to the outlook.
Key developments that could influence markets on Wednesday:
Euro zone, UK final June services and composite PMIs, EZ May producer prices
ECB policymaker and French central bank head Francois Villeroy de Galhau speaks at a financial conference in Paris
US May factory orders, June FOMC minutes
(Reporting by Sonali Desai; Editing by Jacqueline Wong)
This article originally appeared on reuters.com