Market Highlight 01.07.2025

   China’s manufacturing activity contracted for a third straight month in June, though the pace of decline slowed. The Purchasing Managers’ Index (PMI) published by the National Bureau of Statistics rose to 49,7 in June from 49,5 in May. Increases in new orders, purchasing volumes, and supplier delivery times suggest that the government’s stimulus measures, rolled out since late last year, are gradually taking effect. However, the survey also revealed that business sentiment remains subdued. Employment conditions, factory gate prices, and new export orders continue to show weakness, highlighting the need for additional economic stimulus as the country faces headwinds from President Donald Trump’s tariff policies and a prolonged downturn in the real estate sector. Over the past two years, the Chinese government has ramped up support for its vast manufacturing base to revive momentum and achieve its ambitious 2025 growth target of “around 5%”. Premier Li Qiang recently reiterated that the reform agenda launched at the end of last year aims to transition China’s growth model away from one driven by manufacturing toward one increasingly powered by domestic consumption.
  The USD continued its steep decline on Monday, falling nearly 0,5% to reach its lowest level against the euro in almost 4 years (1,1788). The move reflected growing concerns over the U.S government’s budget deficit and persistent uncertainty surrounding trade agreements between the United States and major economies ahead of the critical July 9 deadline. Domestically, the USD/VND interbank exchange rate fell to 26.075 in early trading Monday in line with the dollar’s global weakness, before recovering to 26.125 by day’s end as VND liquidity in the interbank market remained well supported through the OMO channel. The downward trend in the USD/VND exchange rate is expected to continue this morning, with a target range of 26.000 - 26.100.

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