Baxia Markets
July 06, 2021

Low Expectation For US Release

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Later today we are in for a big news release. One that is anticipated by all analysts and economists in the FX world. Will the US show signs of growth, or will there be some unforeseen issues? The release of the ISM Services PMI is scheduled for 2PM GMT. 


What is it? 


The ISM Non-Manufacturing Index is an economic index based on surveys of more than 400 services firms' purchasing and supply executives. The Purchasing Managers' Index (PMI) is a good general guide that shows the economic trends in both the manufacturing and service sectors. The ISM Report On Business provides guidance to supply management professionals, business leaders, economists, and government officials by monitoring the economic conditions of the nation.



What are the Expectations for the ISM Services PMI Release?


Previously in June 2021, the release came out at 64. The expectation for July 2021 is for the ISM Services PMI to drop a little to 63.4. Will that be the case?



Professional Insight


“ISM's Services Purchasing Managers' Index for June is in the spotlight on Tuesday. The headline is projected to retreat from 64 points in May but continues reflecting robust growth. Investors will eye inflation expectations, as represented by the Prices Paid component.” said Yohay Elam, head analyst and founder of Forex Crunch. 


While we might be improving from last month, the lower number shouldn't be discouraging as we see robust growth continue. The pandemic is still not over and patience is key in returning to where we were before all of this started. 



What happens if...


Usually, if the data is greater than 50, it indicates that the industry is expanding, or thriving. So people would like to see a number above 50. The market will take that as a good sign of economic growth.  


What happens if...


If the figure is lower than 50, it indicates a contraction or a decrease. In this situation, we would like to be more cautious about any investment. The lower figure should be taken as a bearish signal for the EUR.



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