Now that the Swiss CPI is out of the way, there’s not much else left for the European session. The focus will be on the US ISM Manufacturing PMI in the American session which could set the trend into the NFP report on Friday.
14:00 GMT/10:00 ET – US August ISM Manufacturing PMI
The US ISM
Manufacturing PMI is expected at 47.5 vs. 46.8 prior. As a reminder, the last month the ISM release was the catalyst that triggered a
huge selloff in risk assets as we got the “growth scare”.
The main
culprit might have been the employment sub-index falling to a new 4-year
low ahead of the NFP report which eventually triggered another wave of selling
as it came out weaker than expected across the board.
Later on, lots of
data in August showed that the weak data in July might have been negatively
affected by Hurricane Beryl, so that’s something that the market will look
at for confirmation.
The S&P Global Manufacturing PMI released two weeks ago wasn’t exactly comforting
though. The index saw the second consecutive contraction and the commentary
was pretty bleak.
The agency said “this
soft-landing scenario looks less convincing when you scratch beneath the
surface of the headline numbers. Growth has become increasingly dependent on
the service sector as manufacturing, which often leads the economic cycle, has
fallen into decline.”
“The manufacturing
sector’s forward-looking orders-to-inventory ratio has fallen to one of the
lowest levels since the global financial crisis. Employment fell in August,
dropping for the first time in three months”.
US ISM Manufacturing PMI
Central bank speakers:
- 12:45 GMT/08:45 ET – BoE’s Breeden (dove – voter)
- 16:45 GMT/12:45 ET – ECB’s Nagel (hawk – voter)
