CNY to weaken further

The PMI data indicates a short-term stabilization is likely in China's manufacturing activity at a low level. Moreover, economic activity will be supported service sector. The increase in consumption shows better performance of the economy ahead. 

Retail sales and industrial production of the economy is expected to show a moderate growth rate as a result of recovery in housing market and recent tax cuts, says Barclays. The downward trend in exports will cause the trade balance to improve.

"We maintain our bearish medium-term view on China, and expect CNY to weaken in the months to come", states Barclays.