The flash US S&P Global October Composite PMI edged higher to 54.3 after printing at 54.0 final in September. Manufacturing activity improved to 47.8 from 47.3 in September, beating the anticipated 47.5. The services index printed at 55.3, up from 55.2 in the previous month and above the 55 forecast.
"October’s flash US PMI survey signalled a further solid rise in business activity to mark a robust start to the fourth quarter. Growth was driven solely by the service sector, however, as manufacturing output contracted for a third month running. Meanwhile, employment fell slightly for a third successive month amid uncertainty ahead of the Presidential Election," the official report states.
Market reaction to US PMI data
The US Dollar edged marginally higher as an immediate reaction to PMI data, but remains on the back foot on a daily basis against most major rivals.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | -0.17% | -0.40% | -0.37% | -0.04% | -0.13% | -0.12% | -0.02% | |
EUR | 0.17% | -0.23% | -0.20% | 0.12% | 0.02% | 0.03% | 0.12% | |
GBP | 0.40% | 0.23% | 0.04% | 0.35% | 0.26% | 0.27% | 0.36% | |
JPY | 0.37% | 0.20% | -0.04% | 0.32% | 0.22% | 0.20% | 0.33% | |
CAD | 0.04% | -0.12% | -0.35% | -0.32% | -0.08% | -0.08% | 0.01% | |
AUD | 0.13% | -0.02% | -0.26% | -0.22% | 0.08% | 0.02% | 0.09% | |
NZD | 0.12% | -0.03% | -0.27% | -0.20% | 0.08% | -0.02% | 0.09% | |
CHF | 0.02% | -0.12% | -0.36% | -0.33% | -0.01% | -0.09% | -0.09% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
This section below was published as a preview of the US S&P Global PMI data at 08:00 GMT.
- The S&P Global preliminary PMIs for October are likely to show little variation from the September final readings.
- The Federal Reserve will likely trim rates again in November, with PMIs having no significant impact on the decision.
- Financial markets revolve around the potential outcome of the US presidential election.
- EUR/USD is poised to extend its decline after breaking below 1.0800.
S&P Global will publish the preliminary estimates of the United States (US) Purchasing Managers Indexes (PMIs) for October on Thursday. The indexes result from surveys of the senior executives in the private sector. They are meant to indicate the overall health of an economy, providing insights into key economic drivers such as GDP, inflation, exports, capacity utilization, employment, and inventories.
S&P Global releases three indexes: The Manufacturing PMI, the Services PMI, and finally, the Composite PMI, which is a weighted average of the two sectors. Readings above 50 indicate that economic activity is expanding, while figures below it represent economic contraction. Such indexes are released every month in advance of other official figures, becoming a key leading indicator of the status of the economy.
According to the September final S&P Global Manufacturing PMI, “the sector moved deeper into contraction territory at the end of the third quarter of the year,” blaming such a result to weaker demand and political uncertainty related to the upcoming US election. The index resulted at 47.3, declining from 47.9 in August.
On the contrary, the PMI for services suggested that the sector’s output expanded, with the index printing at 55.2 in September. Despite easing from 55.7 in August, the Services PMI signalled a “market monthly increase in service sector output at the end of the third quarter, and one that was among the strongest in the past two-and-a-half years.”
As a result, the S&P Global Composite PMI posted 54.0 in September, down from 54.6 in August. The report, however, included a worrisome line: “Inflationary pressures strengthened,” with the increases in input costs and output prices hitting 12-month highs for the service sector and six-month highs for manufacturing.
What can we expect from the next S&P Global PMI report?
Financial markets anticipate a modest improvement in the flash Manufacturing PMI, foreseen at 47.5 in October. The services index is expected to print at 55, while the Composite PMI will likely show little variation from the September reading of 54.
A poor performance of the manufacturing sector would come as no surprise, and the expected uptick would likely neutralise concerns particularly if the Services PMI keeps indicating a solid expansion in the sector.
Overall, recessionary fears have receded, with the focus shifting to the upcoming presidential election and the potential impact of the outcome on the economy. Indeed, better-than-anticipated figures will boost optimism about the American economy and maintain the Federal Reserve (Fed) on the monetary loosening path.
The Fed trimmed the benchmark interest rate by 50 basis points (bps) in its September meeting, and market participants expected the central bank would continue cutting rates at an aggressive pace. However, signs of steady growth spooked away such concerns. Fed officials will likely deliver 25 bps cuts in November and December and will continue to do so in the year ahead. PMI figures should deliver an extremely disappointing surprise to trigger concerns and shift these expectations, which is quite an unlikely scenario.
When will the October flash US S&P Global PMIs be released, and how could they affect EUR/USD?
The S&P Global Manufacturing, Services and Composite PMIs report will be released on Thursday at 13:45 GMT and are expected to show manufacturing output is still in trouble while the service sector remains the strongest. Overall, the anticipated figures represent no significant variation from September final figures.
Ahead of the release, the US Dollar is the strongest currency among major ones, helped by a constant run to safety ahead of the US presidential election. The EUR/USD pair trades below the 1.0800 mark and at fresh multi-week lows. Given tepid European growth-related data, the Euro is among the weakest USD rivals. It is worth noting that the Eurozone PMIs will be released ahead of the US ones and will likely have a negative impact on the local currency.
From a technical perspective, Valeria Bednarik, FXStreet's Chief Analyst, says: “The EUR/USD pair bearish trend is quite evident in the daily chart, with technical indicators maintaining their firm downward slopes, despite being in oversold territory. Other than extreme readings, there are no signs of bearish exhaustion. Even further, the pair is developing below all its moving averages, which gain downward traction far above the current level, reflecting persistent selling interest.”
Bednarik adds: “The pair has an immediate support area at around 1.0750, where it posted several intraday highs and lows back in June and July. Once below it, the next natural support level comes at 1.0700, en route to the year’s low at 1.0601. Near-term resistance lies at around the 1.0840 figure, while a flat 200 Simple Moving Average (SMA) in the daily chart is the next relevant dynamic resistance, currently at around 1.0870.”
Economic Indicator
S&P Global Composite PMI
The S&P Global Composite Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging US private-business activity in the manufacturing and services sector. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for USD.
Read more.Last release: Thu Oct 24, 2024 13:45 (Prel)
Frequency: Monthly
Actual: 54.3
Consensus: -
Previous: 54
Source: S&P Global
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends losses to 1.0550 as focus shifts to US ISM PMI
EUR/USD keeps falling to test 1.0500 in the European session on Monday. The pair is dragged down by dovish ECB-speak, French political woes and a firmer US Dollar following Trump tariffs threat on BRICS-fuelled flight to safety. Investors now await US ISM Manufacturing PMI data.
GBP/USD drops further below 1.2700 on stronger US Dollar
GBP/USD picks up downside momentum below 1.2700 in European trading on Monday. The ongoing decline is sponsored by a goodish pickup in the haven demand for the US Dollar, as traders remain wary over the latest Trump tariffs threat on BRICS nations. US ISM PMI is next in focus.
Gold price seems vulnerable on broad-based USD strength
Gold price remains heavily offered tone through the early European session and is currently placed near the lower end of its daily range, around the $2,629 region. This marks the first day of a negative move in the previous five and is sponsored by a combination of factors.
Bitcoin consolidates while ETH, XRP rallies
Bitcoin consolidated on Monday following its recovery from last week's pullback. At the same time, Ethereum and Ripple extended their rallies, driven by investors reallocating capital from BTC to altcoins, signaling the potential for continued upward momentum.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.