China's economy still struggling to gain momentum, points Caixin PMI data

The Caixin China manufacturing purchasing managers' index weakened to 50.0 in August from 50.6 in July, but remained above the 50 mark for the second straight month. The correction was expected after July Caixin showed the highest manufacturing growth since February 2015.

Details of the report showed production and total new orders both rose at slower rates, while export sales continued to decline. Job losses continued, though the latest reduction was the lowest in 2016 to date. This in turn contributed to a further rise in work backlogs,  Caixin said. Inflationary pressures eased, with both input costs and prices charged increasing at weaker rates than seen in July.

Seperate data by National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing showed official manufacturing PMI came in at 50.4 in August, rising from 49.9 in July and beating the market expectation of 49.8.

"The PMIs have improved in recent months, lifted by govt’ stimulus and higher credit growth. Now credit growth is slowing down, and signs of fading effect of the recent stimulus, which should push the PMIs further down in coming months," said DNB Bank in a report.