Market Highlight 05.03.2026

China’s factory activity weakened more than expected, official data released on Wednesday showed, as the longest Lunar New Year holiday on record weighed on output and construction activity. According to the National Bureau of Statistics, the manufacturing PMI slipped to 49 in February from 49,3 in January, matching a four-month low. The outlook for China’s industrial sector remains subdued amid soft domestic demand and persistent uncertainty surrounding U.S tariff policy. Escalating military tensions in the Middle East also raise the risk of renewed disruptions to global trade, potentially pushing up input costs for Chinese manufacturers. China is set to convene its key annual political meetings, where Beijing is expected to unveil this year’s economic growth target. Markets are also watching for a summit between Chinese President Xi Jinping and U.S President Donald Trump in the coming weeks, looking for signals on bilateral progress and the trajectory of trade barriers between the world’s two largest economies.

The USD Index fell 0,3% yesterday from a three-month high, as markets grew more optimistic that tensions around Iran could ease in the near term. U.S data released overnight showed private-sector employment in February posted its strongest increase in 7 months, although the prior month’s reading was sharply revised lower. Separately, another report indicated the services PMI climbed to 56,1 in February - its highest level since July 2022 - up from 53,8 in January.  

In Vietnam, the USD/VND interbank exchange rate traded largely within the 26.215 - 26.225 range yesterday. Markets will continue to closely monitor developments in the Middle East in the period ahead.

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