China's Factory Activity Unexpectedly Expands
A private survey revealed unexpected growth in China's factory activity for June, especially among export-oriented manufacturers.
Key Findings:
- The Caixin/S&P Global manufacturing PMI reached 50.4, exceeding expectations.
- This rebound contrasts with the official PMI report showing contraction.
- Chinese exporters may be front-loading shipments to avoid potential U.S. tariffs.
- Exports to the U.S. have fallen, but firms are diversifying to Southeast Asia and the EU.
Potential de-escalation in the fentanyl dispute could lead to tariff reductions, but softening export momentum is also being observed.