China RatingDog Services PMI Eases, Margin Pressures Build

AUDUSD – 1 Minute Chart – 051125 What’s Next? Last week, President Trump and Chinese President Xi agreed to a one-year trade truce. While lower tariffs could bolster the Chinese economy, economists expect more stimulus from Beijing to boost domestic consumption.

The October PMI numbers revealed continued margin squeezeswhich are affecting the labor market. Rising unemployment would likely curb consumer spending, challenging Beijing’s 5% GDP growth target.

Looking ahead, October’s trade data, due out Friday, November 7, will provide further insights into the demand environment. Slowing imports and exports could fuel speculation about a meaningful stimulus package from Beijing. On the other hand, strong demand could enable Beijing to delay policy measures.

November could prove pivotal for Mainland China’s equity markets. Upbeat data and policy support could send the CSI 300 and the Shanghai Composite to new 2025 highs. Conversely, weaker data and the absence of political support could derail the 2025 rally.

The CSI 300 has gained 16.43% year-to-date, while the Shanghai Composite Index has risen 17.54%. However, the Hang Seng Index leads the gains, surging 27.78%. Policy support would likely counter weak data, setting up a bullish outlook.

Friday’s trade figures could decide whether Beijing steps in — or steps back.

Discover strategies to navigate this week’s market trends here.