Week in Asia: China PMI, central banks

China's monthly gauges of factory activity and central bank policy decisions in Australia and Japan will be the key events in Asia this week.

On Monday, Beijing will release its official manufacturing purchasing manager's index (PMI) for August followed by a separate private reading from HSBC.

The official index is expected to fall to 51.2 from July's 27-month high of 51.7, according to the median forecast of 13 economists in a Reuters poll.

Read MoreChina faces middle-income trap as reforms fail

A preliminary survey released by HSBC and Markit last month showed factory activity falling to a three-month low in August on slowing output and new orders.

"We expect the official PMI to hold up much better than the flash HSBC PMI. With the money market rates back to where they were before the July spike, we expect the dip in the HSBC PMI to be transitory," said Tim Condon, head of research, Asia, at ING Financial Markets.

Zhang Peng | LightRocket | Getty Images

On central bank watch

The Reserve Bank of Australia (RBA) is due to announce its policy decision on Tuesday but no change is expected given recent commentary from governor Glenn Stevens affirming a period of rate stability.

Read MoreAustralia central bank sticks to low rate stance

In HSBC's view, currency movements are crucial for the central bank. They believe that the longer the Australian dollar stays high, the longer the RBA will leave rates on hold.

"With this in mind, we have pushed back our call for the RBA's next rate hike to Q2 of 2015 (previously Q1 2015), though we remain of the view that rate hikes will come earlier than current market pricing implies," said analysts from the bank in a report.

On Thursday, the Bank of Japan (BOJ) is widely expected to keep monetary settings intact at its rate review despite growing calls for more stimulus following a spate of worse-than-expected data. On Friday, data showed core inflation rose 1.3 percent in July, below the central bank's inflation target.

Read MoreJapan economy still spotty, data deluge shows

According to Dominic Bunning, FX strategist at HSBC, the central bank is unlikely to ease until the second-quarter of 2015 at the earliest.

Big data week for Australia

Investors down under will face a data avalanche with second-quarter gross domestic product (GDP) due on Wednesday, and July retail sales and trade data on Thursday.

Read MoreAre Aussie dollar bears right?

"Our expectation is for GDP growth of 0.5 percent quarter on quarter (or 3.1 percent on year), but weak readings for net exports, consumer spending and investment suggest the risks are all skewed to the downside. In fact there is a high risk of a slight contraction in GDP," said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors.

In regards to trade, Oliver expects a fourth deficit in a row after the economy recorded an A$1.68 billion deficit in June while he sees only modest growth for retail sales.