China's August data likely to be weaker than in July

The PBoC move comes after some rapid deterioration in the Q3 data and equity market turmoil.

Following across-the-board weakness in China's July activity data, including decelerating industrial production and moderating investment growth amid further slowing in property investment, the August Caixin flash PMI fell unexpectedly to 47.1, its lowest level since March 2009. 

"This suggests that the August data will be weaker than in July and Q3 growth will be lower than in Q2. While the official GDP growth was 7% in Q2, alternative indicators (LKQ index, electricity output, crude steel usage, and fiscal revenue) suggest actual growth of 50-200bp lower than the official print, depending on the sector", says Barclays.

Meanwhile, the onshore stock market plunged for a fourth straight day, with the SHCOMP down more than 15% in two days and 42% from its June peak. The latest China data and stock market routs triggered a further dramatic sell-off in the global equity, currency and commodity markets, which had been under pressure since the surprise CNY devaluation on 11 August.