Breaking: US S&P Manufacturing PMI increases to 50.4 in April, Composite PMI improves to 53.5


Business activity in the US private sector expanded at a strengthening pace in April with S&P Global Composite PMI rising to 53.5 (flash) from 52.3 in March. This reading came in better than the market expectation of 52.8.

S&P Global Manufacturing PMI improved to 50.4 in the same period from 49.2 and Services PMI edged higher to 53.7, surpassing analysts' forecast of 51.5.

Commenting on the data, "the latest survey adds to signs that business activity has regained growth momentum after contracting over the seven months to January," noted Chris Williamson, Chief Business Economist at S&P Global Market Intelligence. "The latest reading is indicative of GDP growing at an annualized rate of just over 2%."

Regarding the employment situation in the private sector, "jobs growth has accelerated alongside the resurgence of demand, aided by reports of vacancies being more easily filled, reflecting improved supply of candidates and higher wages," Williamson explained.

Market reaction

The US Dollar gathered strength against its major rivals with the initial reaction and the US Dollar Index (DXY) climbed above 102.00. However, the upbeat PMI figures helped Wall Street's main indexes gain traction following a negative opening. In turn, the improving risk mood didn't allow the DXY to extend its rally.

At the time of press, the DXY was virtually unchanged on the day and the S&P 500 was trading modestly higher.

The EUR/USD pair, which dropped below 1.0950 in the first minutes following the PMI release, erased its daily gains but remained below. Meanwhile, the benchmark 10-year US Treasury bond yield clings to modest daily gains above 3.5% after the data, forcing Gold to stay on the back foot heading into the weekend.


  • April S&P Global Manufacturing and Services PMIs preliminary releases are seen declining after the previous jump.
  • Big deviations to the data are likely to ramp up volatility and impact the Federal Reserve pricing.
  • EUR/USD bulls stay hopeful whilst above 1.0900 ahead of the release, eyeing the 1.1000 mark.

S&P Global Purchasing Managers Index (PMI) measures private sector business activity in major economies on a monthly basis and in advance of comparable official economic data. On Friday, April 21, the company will unveil the April preliminary estimates of manufacturing PMI and services PMI for the United States (US).

Global businesses are still trying to recover from the pandemic-related setback that saw the world come to a halt three years ago. It has been a bumpy road, with back and forths in the middle, but central bank decisions to tighten their monetary policies took its toll on businesses, with activity contracting for most of 2022.

In March, however, business activity in the United States unexpectedly rebounded, as demand surged, especially in the services industry. The S&P Global preliminary US Composite PMI jumped to 53.3 in March, up from 50.1 in February. The Services PMI Index rose to 53.8 from 50.6, while the Manufacturing PMI climbed to 49.3 from 47.3.

Despite the encouraging resurgence in business activity last month, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, warned that inflation remains a nagging issue, adding that “the purchasing managers surveyed indicated that selling prices were increasing at a quicker rate despite lower costs in the manufacturing sector and that the services sector is also raising prices, mainly as a result of faster wage growth.”

What to expect in the next S&P Global PMI report?

The gauge for manufacturing PMI is expected to decline to 49.0 in April, compared with the final readout of 49.2 recorded in March.

The services PMI, meanwhile, is anticipated to slow its pace of expansion, arriving at 51.5 in April vs. the previous month’s final print of 52.6. 

However, the composite PMI is expected to increase to 52.8 in the current month, as against the final March figure of 52.3.

When will be April flash US S&P Global PMIs report released and how could it affect EUR/USD?

The S&P Global PMI report is scheduled for release at 13:45 GMT, on April 21. Ahead of the key release, the US Dollar is struggling to extend its recovery momentum, keeping the sentiment around the EUR/USD pair buoyed. A stronger US PMI print will confirm a 25 basis points (bps) Federal Reserve rate hike in May while deferring rate cut expectations toward the end of this year. At the time of writing, markets are pricing an 82% probability of a quarter percentage point Fed rate hike next month, with rate cuts seen as early as July.

On the other hand, weaker US business activity data will accentuate concerns about the US economy dipping into a recession, which could fuel Fed rate cuts bets. The US Dollar is likely to show resilience in the face of the dovish Fed outlook, as it will continue to benefit the Greenback's relative safe-haven status.

The divergent monetary policy outlooks between the Federal Reserve and European Central Bank (ECB) suggest that the path of least resistance for the EUR/USD pair appears to be the upside. That said, any immediate market reaction could peter out, as the end-of-the-week flows could come into play. It is worth noting that the Fed policymakers enter their ‘blackout period’ from April 22 ahead of the May 2-3 policy meeting, and therefore, the last words from the officials could also have a significant impact on the US Dollar valuations. This, in turn, warrants some caution for aggressive traders and before positioning for a firm near-term direction.

Yohay Elam, Senior Analyst at FXStreet, explains how the US Dollar could react to the data, “If the S&P Global PMIs, and especially the Services PMI, miss expectations, concerns about a downturn could take over. When the US economy sneezes, the rest of the world catches a cold – rushing to the safety of the US Dollar,”

“Conversely, if the figures beat estimates, investors may fear a tougher stance from Fed officials. While a 25 bps hike in May is priced in, another one in June is still uncertain. Any figure that would raise the chances of another increase in borrowing costs could push expectations higher, further boosting the Greenback,” Yohay adds.

Meanwhile, Dhwani Mehta, Asian Session Lead Analyst at FXStreet, offers a brief technical outlook for the EUR/USD pair and writes: “the bull-bear tug-of-war is likely to extend, as the pair continues to waver in a tight range at around 1.0950. The 14-day Relative Strength Index (RSI) is holding above the midline, offering an edge to Euro buyers while the 1.1000 mark remains a tough nut to crack for sellers heading into the US PMIs showdown.”

Dhwani also outlines important technical levels to trade the EUR/USD pair: “On the upside, a sustained move above the psychological 1.1000 level is needed to initiate a fresh upswing toward the yearly high of 1.1076. Alternatively, immediate support awaits at the bullish 21-Day Moving Average (DMA) at 1.0912, below which the 1.0850 psychological support could be tested before the bears approach the 1.0835 static support.

S&P Global PMI-related content

About the US Manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI) released by S&P Global captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the United States. Readings above 50 imply the economy is expanding, making investors understood it as a bullish for the USD, whereas a result below 50 points for an economic contraction, and weighs negatively on the currency.

About the US Services PMI

The Services Purchasing Managers Index (PMI) released by S&P Global captures business conditions in the services sector. As the services sector dominates a large part of total GDP, the services PMI is an important indicator of the overall economic condition in US. A result above 50 signals is bullish for the USD, whereas a result below 50 is seen as bearish.

When does the next United States S&P Global Composite PMI take place?

United States S&P Global Composite PMI is taking place on Tuesday, May 23rd at 13:45 GMT.

Stay tuned to all the upcoming events that may affect the markets on our economic calendar.

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