US S&P Global PMI Preview: Business activity likely to show steady expansion in November
S&P Global will release on Friday the November flash Purchasing Managers' Indices (PMIs) for most major economies, including the United States (US). These surveys of top private sector executives provide an early indication of the business sector’s economic health.
Market participants anticipate that the Global Services PMI will print at 54.8, matching the October reading, while Global Manufacturing output is expected to print at 52, slightly below the 52.5 reading of the previous month. Finally, it is worth noting that the Composite PMI printed at 54.6 in October.
The US is coming from the longest government shutdown in its history, which means little macroeconomic data has been released in the last couple of months. Indeed, the country kick-started reporting on Thursday, but offered the September Nonfarm Payrolls (NFP) report, which showed the economy added 119,000 new positions in the month, better than the 50,000 expected. The Unemployment Rate increased to 4.4%, worse than the previous 4.3%, although the Participation Rate increased from 62.3% to 62.4%, partially offsetting the uptick in the unemployment rate. As a result, markets turned optimistic, with the US Dollar (USD) under mild near-term selling pressure.
Still, the market’s hunger for economic-related data ahead of the Federal Reserve (Fed) December monetary policy meeting could see the S&P Global PMIs having a wider-than-usual impact on the US Dollar (USD).
S&P Global separately reports manufacturing activity and services activity through the Manufacturing PMI and the Services PMI. Additionally, they present a weighted combination of the two, the Composite PMI. Generally speaking, a reading of 50 or more indicates expansion, while below the threshold, the indexes indicate contraction.
The report has two versions, a preliminary estimate and a final revision, which comes around two weeks later. These preliminary versions or flash estimates tend to have a broader impact on the US Dollar.
Source: FXstreet.com
