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S&P Global will issue flash estimates of the United States (US) Purchasing Managers Indexes (PMIs) for June, a monthly survey of business activity, on Friday. The survey is expected to show that the economic activity in the private sector continued to expand at a moderate pace.<\/p>\n
In May, S&P Global Composite PMI improved to 54.5 from 51.3 in April. The Manufacturing PMI edged higher to 51.3 from 50.0, while the Services PMI climbed to 54.8 from 51.3. Assessing the survey\u2019s findings, \u201cthe US economic upturn has accelerated again after two months of slower growth, with the early PMI data signaling the fastest expansion for just over two years in May,\u201d Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said.\u00a0<\/p>\n
Regarding the inflation dynamics, Williamson noted that selling price inflation ticked higher in May. \u201cThe main inflationary impetus is now coming from manufacturing rather than services, meaning rates<\/a> of inflation for costs and selling prices are now somewhat elevated by pre-pandemic standards in both sectors to suggest that the final mile down to the Fed\u2019s 2% target still seems elusive,\u201d he elaborated further.<\/p>\n PMI surveys are widely accepted as forward-looking or leading indicators. As the Federal Reserve (Fed) clings to a data-dependent approach to policymaking, investors will pay close attention to PMI data heading into the weekend.\u00a0<\/p>\n The S&P Global Manufacturing PMI is forecast<\/a> to edge lower to 51.0 from 51.3 in May, and the Services PMI is expected to retreat to 53.7 from 54.8. A reading above 50.0 presents an expansion in the sector\u2019s business activity.<\/p>\n The S&P Global Manufacturing, Services and Composite PMI reports will be issued on Friday, June 21, at 13:45 GMT.\u00a0<\/p>\n In case either the Manufacturing or the Services PMI unexpectedly falls below 50.0 and points to contraction, the initial market reaction could make it difficult for the US Dollar (USD) to find demand and help EUR\/USD<\/a> edge higher. On the other hand, the USD could gather strength if there is a positive surprise in either PMI print.<\/p>\n Focus will shift to the underlying details on employment and inflation developments if PMIs come in near analysts\u2019 estimates. In case surveys highlight higher input inflation, investors could refrain from pricing in a Federal Reserve rate cut in September and trigger a leg lower in EUR\/USD. A significant negative contribution to either PMI from employment could cause the USD to come under selling pressure and provide a boost to the pair.<\/p>\n FXStreet<\/a> Analyst Yohay Elam thinks that upbeat PMI data would hurt Gold and support the US Dollar, while soft figures would have the opposite impact. \u201cStocks might follow the US Dollar if the data is weak \u2013 I expect investors to take profits off the table ahead of the weekend,\u201d he adds.\u00a0<\/p>\nWhat to expect from the next S&P Global PMI report?<\/h2>\n
When will June flash US S&P Global PMIs be released and how could they affect EUR\/USD?<\/h2>\n