Important PMI Figures To Move The Market

Purchasing Manager Index (PMI) is the barometer of economic strength for manufacturing and service sector. The index ranges between 0 to 100 and a reading below 50 level signals contraction of economic activities into the concerned sector. On Thursday, various global counterparts are scheduled to print first estimations of PMI numbers which can cause volatility into the world’s largest financial market, Forex. The flow of PMIs would start from HSBC Flash Manufacturing PMI of China and would extend towards French, German and European Flash Manufacturing and Services PMIs in order to stop at US Flash Manufacturing PMI.

For Fundamental update Read: A look at some important events in the week-ahead

HSBC’s release of Chinese Flash Manufacturing PMI is a closely watched indicator to gauge the health of the world’s second-largest economy. Being the largest industrial player of the world, indicators showing the stance of manufacturing sector from China commands magnified impact on commodity currencies. Moreover, China is the largest trading partner of Australia and world’s largest gold consumer which makes its economic readings crucial for gold and AUD movements. Concerning the current reading of the manufacturing gauge, market forecasts suggest it to continue remain below 50 level for the fifth consecutive month. The reading is expected to test 48.4 level against previously revised number of 48.1. Should the actual reading match consensus, pairs connected to AUD together with commodities market are expected to weaken. However, a reading above 50 level can provide considerable strength to the AUD and the commodities market.

Also Read: Gold and Silver – Technical Update

Moving towards the Flash reading of Manufacturing and Services sectors from Germany, France and Europe, it can be witnessed that all these figures are expected to remain near to the prior levels. Hence, these reading shouldn’t generate much of the volatility if the actual figures match forecast. However, should there be magnified changes in actual readings as compared to forecasts, Euro can witness more volatility.

Also Read: Technical Update – EURUSD, USDJPY, AUDUSD

Last but not the least, US Flash Manufacturing PMI signals a mild improvement into the reading to 55.6 level against the prior release of 55.4. Should the actual reading match the forecast or

Original Article: Admiral Markets