Fresh Signs of Weakness: China Slowdown Pressures Markets

New economic data from China pointed to a sharper-than-expected slowdown at the start of the year. The manufacturing purchasing managers’ index fell to 49.3, remaining below the 50 level that separates expansion from contraction and missing market expectations. At the same time, the services PMI declined to 49.4, marking its deepest contraction in three years and signaling broad-based weakness across both production and service sectors.


Asian Markets React Swiftly

Financial markets responded quickly to the disappointing data. China’s Shanghai Composite Index dropped by more than 2.0%, sliding to its lowest level in four weeks, as concerns grew over the pace of China’s economic recovery amid soft domestic demand and a challenging global environment.


Attention Turns to Key U.S. Indicators

The developments come as investors await a series of closely watched U.S. economic releases that could help complete the picture for the world’s two largest economies. Scheduled data include the JOLTS job openings report for December and the ADP private-sector employment report for January.


A Pivotal Week for Global Markets

Markets are also preparing for the release of the U.S. services PMI, weekly jobless claims, the January nonfarm payrolls report, average wage growth indicators, and the University of Michigan consumer sentiment index. Together, these releases are expected to play a crucial role in shaping expectations for global growth and the future path of monetary policy.