PMI DATA TAKE THE SPOTLIGHT
Tuesday is PMI day for the global financial markets, as IHS Markit reports on a bevy of surveys from Europe and the United States.
Markit will release PMI data for France, Germany, Eurozone and United States throughout the day. For each jurisdiction, the market research firm will provide services PMI, manufacturing PMI and composite PMI. The composite indicator combines the performances of both services and manufacturing industries.
The French PMI reports will be released at 07:00 GMT. Thirty minutes later, German and Eurozone PMIs will make headlines.
The Eurozone composite PMI is forecast to weaken to 56.5 in October from 56.7 the previous month. Germany’s composite index is also expected to weaken by 0.1 point to 57.6
At 13:45 GMT, Markit will release its US PMI results. Both services and manufacturing industries are forecast to strengthen.
Fifteen minutes later, the Federal Reserve Bank of Richmond will release its monthly manufacturing index for October. The report, which tracks factory output in the Richmond area, is expected to fall to 17 from 19.
Energy traders will be keeping a close eye on weekly inventory data courtesy of the American Petroleum Institute (API). The API report is a precursor to the official inventory data from the US Energy Information Administration (EIA). That report comes our way Wednesday morning New York time.
Earlier in the day, IHS Markit said Japan’s manufacturing PMI weakened unexpectedly this month. The flash Japan manufacturing PMI slipped to 52.5 in October from 52.9 the previous month, as business confidence softened to an 11-month low.
“Although still improving solidly, the Japanese manufacturing sector appeared to lose some momentum in October, as growth eased from September’s four-month high,” said Joe Hayes, the economist at IHS Markit.
The Japanese yen declined on Monday in the wake of Prime Minister Shinzo Abe’s sweeping election victory. However, the currency has since recovered from three-month lows against the greenback. The USD/JPY is currently trading around 113.36, having traded as high as 114.06 at the start of Monday. The pair faces strong resistance at 114.00, with immediate support located on the lower end of 113.00.
The euro gained momentum against the dollar Monday, but the rally stopped short of the all-important 1.1800 level. The EUR/USD could see heavy volatility later this week as the European Central Bank (ECB) unveils its policy decision. In the meantime, momentum and RSI indicators are both neutral.
US oil prices settled near $52 a barrel Monday on news of record OPEC deal compliance. A gradual reduction in crude supplies, coupled with improving demand, have helped oil prices stabilize north of $50 a barrel in recent months. US crude continues to trade near $52, with the short-term technical indicators signaling continued upside in store.