*Economic activity in China`s manufacturing sector surprisingly receded during July.
*China warns that its army will take necessary actions in case Pelosi visits Taiwan.
*S&P Global PMI for Mexico logged a contraction in economic activity in the manufacturing sector during July (48.5).
*FED commits itself to do whatever is necessary to contain inflation and take it to its 2% target: Neel Kashkari, Minneapolis FED.
*Democrats could lose between 30 and 40 seats in US Congress during intermediate elections: Bloomberg Economics.
*Without fiscal stimulus, the price of gasoline would be 35 pesos per liter and inflation would set at 11%: Gabriel Yorio, Undersecretary of Finance.
*Economic indicators: The US Manufacturing ISM will be made public (52e.).
Weakness in China`s economy. Official PMI`s for China`s economy point towards a surprising contraction in economic activity in the manufacturing sector during July after having seen a slight rebound in June. The manufacturing sector`s leading indicator dropped to 49, which suggests there was an economic contraction, and the data shows great fragility in China`s recovery. The virus`s spread has caused recent shutdowns among factories in important manufacturing centers such as Shenzhen during the month, but demand has also decreased rapidly with contractions being logged in new orders and export orders. The rebound seen in June was practically erased due to weakness in July. The indicator for the services and construction sectors continued growing, although at a more moderate pace (53.8) – also due to a contraction in demand. Additionally, surveys on the real-estate sector`s current status revealed that property sales are still decreasing (-39% July). The disappointing data maintains expectations of stimulus on behalf of authorities, who have said they will aggressively increase infrastructure investment in the second half of the year.