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Will a Pause in US-China Tensions Help China’s Services Sector?

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China’s services PMI in April

According to data provided by Markit Economics, China’s final Markit services PMI rose significantly in April. It was 52.9 in April compared to 52.3 in March. It beat the preliminary market estimate of 52.2.

China’s services PMI for April was affected by the following factors:

  • Production output and volume rose at a faster pace in April.
  • New business orders saw a stronger increase in April.
  • Employment in the services sector improved for the second straight month.
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ETFs in April

After two rounds of talks between the United States (SPY) and China over trade relations, the tension has softened, and market participants are relieved. Although the first round of talks wasn’t fruitful and didn’t gain much headway, the second round was a little better. All these factors are expected to help China’s services sector.

The iShares China Large-Cap ETF (FXI) fell 0.65% in April. The Direxion Daily FTSE China Bull 3X ETF (YINN), which tracks the performance of China (ASHR), fell 3.3% in April.

In the next part of this series, we’ll analyze Indonesia’s manufacturing PMI in April.

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