China Stocks Slip Before PMI Data

Market Snapshot

Asset	Level	Change
Shanghai Composite	3,813.31	-1.16%
CSI 300	4,569.52	-1.71%
Hang Seng	25,207.18	+0.98%
TAIEX	43,634.19	-0.05%
USD/CNY	6.76	-0.16%
USD/HKD	7.84	-0.02%
Copper	6.34	-0.05%
Brent Crude	83.76	-5.21%
Gold	4,028.80	-1.12%
Bitcoin	63,847.02	+0.19%
China 2Y Govt Yield	-	-
China 10Y Govt Yield	-	-

Prior Economic Events

Data	Prior	Cons	Actual
No events available

Today's Economic Events

Data	Prior	Cons	Time
NBS Manufacturing PMI	50.30	50	17:30
NBS Non-Manufacturing PMI	50.20	50	17:30

Mainland China equities fell with CSI 300 down 1.71% while Hang Seng rose 0.98%
Yuan traded rangebound near 6.76 after PBoC fixed USD/CNY at 6.7928
HKMA survey showed Hong Kong banks scoring only 2.3/10 on quantum readiness

Yesterday's Recap

Mainland China equities declined as Shanghai Composite fell 1.16% and CSI 300 dropped 1.71% amid subdued sentiment ahead of the July 30 PMI prints. The yuan remained steady at 6.76 after the PBoC set its daily reference rate at 6.7928, limiting volatility against the dollar. Hong Kong’s Hang Seng index advanced 0.98% while Taiwan’s TAIEX closed essentially flat at a 0.05% decline.

China-Africa trade reached a record 1.41 trillion yuan in the first half, underscoring resilient external demand for mainland goods. No major data releases occurred on July 27 across Greater China. The HKMA released its Quantum Preparedness Index, revealing that local banks lag significantly in preparations for quantum threats.

Copper prices edged down 0.05% to 6.34, reflecting modest caution on China growth prospects. Brent crude fell 5.21% to 83.76 on weaker demand signals from Asia. Gold declined 1.12% to 4,028.80 as risk appetite improved in Hong Kong equities.

China’s chipmakers reported a 2,580% profit surge in recent months, highlighting divergence between tech and traditional sectors amid US export controls. Property sector weakness continues to weigh on domestic demand, with limited signs of stabilization in major cities.

The Day Ahead

Markets will focus on the July 30 release of NBS Manufacturing and Non-Manufacturing PMI figures, both expected to print at 50.0. Analysts will watch for any downside surprise that could reinforce expectations of further PBoC easing measures. No rate decisions or trade data are scheduled for Hong Kong or Taiwan on July 29.

Investors will also monitor Politburo signals and any updates on US tariff developments that could affect cross-strait semiconductor flows. Equity futures point to a cautious open in Shanghai and Shenzhen ahead of the PMI. Taiwan’s five-year government bond yield climbed to the highest level since 2008 on growing rate hike expectations from the CBC.

Broader trade data showed resilient mainland exports despite tariff pressures, supported by strong Africa and ASEAN linkages. Semiconductor supply chains remain a key vulnerability for Taiwan’s export outlook.

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Other Economic Notes

China’s chipmakers reported a 2,580% profit surge in recent months, highlighting divergence between tech and traditional sectors amid US export controls. Property sector weakness continues to weigh on domestic demand, with limited signs of stabilization in major cities. Taiwan’s five-year government bond yield climbed to the highest level since 2008 on growing rate hike expectations from the CBC.

Broader trade data showed resilient mainland exports despite tariff pressures, supported by strong Africa and ASEAN linkages. Semiconductor supply chains remain a key vulnerability for Taiwan’s export outlook. ECB analysts credited China’s stimulus and export strength with supporting global growth amid slowing European activity.

US tariff announcements continue to create uncertainty for Chinese supply chains, though broad exemptions have limited immediate ASEAN and India impacts.

Global Macro News

ECB analysts credited China’s stimulus and export strength with supporting global growth amid slowing European activity. US tariff announcements continue to create uncertainty for Chinese supply chains, though broad exemptions have limited immediate ASEAN and India impacts. Nvidia CEO Jensen Huang met US Commerce Secretary Howard Lutnick to discuss China-related export scrutiny.

Brent crude fell 5.21% to 83.76 on weaker demand signals from Asia. Gold declined 1.12% to 4,028.80 as risk appetite improved in Hong Kong equities. The upcoming FOMC meeting is expected to influence yuan and Taiwan dollar flows through shifts in dollar strength.

Global semiconductor stocks faced renewed selling pressure, weighing on Taiwan’s tech-heavy index. HKMA survey showed Hong Kong banks scoring only 2.3/10 on quantum readiness, prompting regulatory calls for faster transition planning.

Greater China Central Banks Watch

The PBoC maintained its daily USD/CNY fix at 6.7928, keeping the yuan within a narrow band while liquidity operations remained steady ahead of the Politburo meeting. No MLF or LPR adjustments were signaled, though analysts continue to price in potential RRR cuts if PMI data disappoint. The HKMA reiterated its commitment to the USD/HKD peg at 7.84, with aggregate balance data showing no immediate pressure on reserves.

Hong Kong banks scored just 2.3 out of 10 on the HKMA’s new Quantum Preparedness Index, prompting regulatory calls for faster transition planning. Taiwan’s CBC held its policy rate steady and intervened to support the Taiwan dollar near 32.38 against the US dollar amid foreign outflows. The central bank highlighted resilience in traditional industries despite China-US tensions affecting semiconductor exports.

The committee voted to hold.

Greater China Macro Daily(Beta Mode)