Chinese RatingDog Composite PMI (Aug) 52.1 (Prev. 50.8)

A composite moving further above 50 after sitting just over the line in the prior month points to momentum building rather than fading, and in past episodes sustained stretches above the breakeven mark in this series have tended to show through in the services component rather than in heavy industry. The composite is an aggregation of the already-released manufacturing and services prints, so it rarely reprices anything on its own; the marginal information was in those components. The channels that have historically responded to a firm private survey of this kind are the China-sensitive cyclicals: the Australian dollar, copper and iron ore, and the offshore yuan, with spillover into the regional equity complex. The follow-on calendar items are the trade, credit and activity data for the same month, where confirmation or contradiction of the survey tone has typically been the test of whether a PMI uptick is durable. Whether this run of expansion prompts any policy response, or reflects prior support measures feeding through, is the question that determines how much weight the print carries.