The PMI is an economic indicator that provides an early overview of the performance of the services sector in a particular country or region. It is released before the final PMI data and is based on a preliminary survey of purchasing managers in service companies.
Here are the key points about Flash Services PMI:
Definition: The Services PMI is a composite index derived from surveys conducted among purchasing managers in service companies. It measures working conditions in the services sector, including factors such as new business, employment, business outlook, supplier delivery, and prices..
Timing: The services PMI is released before the final PMI reading, providing an early indication of economic activity in the services sector for a given period. It provides timely insights into business conditions and can help anticipate possible changes in economic trends.
Survey Methodology: Similar to the manufacturing PMI, PMI surveys for the services sector are usually conducted by private companies or research agencies. Purchasing managers in service companies are required to present their assessments of various business indicators, usually on a scale of 0 to 100. A reading above 50 indicates expansion in the services sector, while a reading below 50 indicates contraction..
Key Indicator: Flash Services PMI is a leading indicator because it reflects the views of purchasing managers who have insight into their companies’ new business orders, staffing levels, and expectations of future activity. Changes in the PMI could provide early signals of shifts in economic activity and business sentiment in the services sector.
Market Impact: The Flash Services PMI is closely monitored by financial market participants, including traders, economists, and investors. A higher-than-expected PMI reading suggests a stronger services sector, which could positively impact the country’s currency, stock markets and bond yields.
US business activity improved in June according to the PMI
Preliminary data from the US S&P Global Composite PMI indicates an improvement in June as the index rose to 54.6 compared to May’s reading of 54.5. This indicates that private sector business activity in the United States continues to expand at a healthy pace.
In the manufacturing sector, the S&P Global Manufacturing PMI rose to 51.7 in June compared to 51.3 in the previous month. In the services sector, the services PMI rose to 55.1 from 54.8. Both readings beat analysts’ estimates..
In terms of inflation, the data points to a slowdown in selling price inflation after rising in May, reinforcing expectations of the Federal Reserve’s inflation target of 2%..
The market reaction to these indicators indicates a strengthening of the US dollar against its rivals. Currency markets are constantly updated, so current prices should be reviewed for accurate information on the current performance of the US dollar..
In summary, preliminary US PMI data indicate that private sector business activity continued to expand at a healthy pace in June, reinforcing expectations of a strong end to the second quarter.
Similar to the Flash manufacturing PMI, the PMI for Flash services is released before the final PMI data. The PMI (PMI) includes) final on a larger sample size and more comprehensive survey responses. While a quick reading provides an early estimate, the final PMI provides a more complete picture of the services sector’s performance.
Positive PMI outlook pushes dollar higher
The Flash manufacturing PMI is usually released a few weeks before the final PMI data. The final PMI includes a larger sample size and more comprehensive survey responses. While a quick reading provides an early estimate, the final PMI provides a more complete picture of the manufacturing sector’s performance.
USDJPY rose back to the uptrend and returned above the 159.00 level after the stronger-than-expected quick data from the S&P Global Manufacturing and Services Index. The trading price rose to 159.206. This results in it reaching 100 pips below the 2024 high of 160.208. The highest level was back in 1991 when the high price reached 160.40 .However, the last two declines have found support for buyers against those moving averages at 158.916. This increases the importance of levels to move forward at least in the short term.
As long as the price can stay above the bias in the short term it is more bullish. If the price moves below, be prepared for buyers to turn into sellers at least in the short term.
Regarding inflation dynamics, Williamson noted that selling price inflation picked up in May. “The main inflationary driver now comes from manufacturing rather than services, which means that inflation rates for costs and selling prices are now fairly high by pre-pandemic standards in both sectors to suggest that the recent tilt down to the Fed’s 2% target still seems clear. Elusive “, he explained further.
The Flash Manufacturing PMI is an important economic indicator that provides an early assessment of the performance of the manufacturing sector. It is closely monitored by market participants because it can provide insights into economic growth, business sentiment, and potential market movements.
