S&P Global will release on Wednesday its preliminary September Purchasing Managers' Indices (PMIs) for the United States, based on surveys of top private sector executives, to provide an early indication of economic momentum. The report will be released at 13:45 GMT on Wednesday, according to reports from S&P Global. The data is expected to highlight US economic resilience and provide some of the earliest signs of the economy's direction. These monthly snapshots analyze production and export patterns, capacity utilization, employment, and inventory levels, offering crucial insights into business activity trends.
Investors anticipate some easing in September's flash Manufacturing PMI from 53.9 to 53.5, while the Services PMI is projected to ease from 56.5 to 56, as reported by S&P Global. The report includes three measures: the Manufacturing PMI, the Services PMI, and the Composite PMI (a weighted combination of the two), each calibrated such that numbers above 50 indicate growth and readings below that threshold indicate contraction. Although a minor decline may not scare markets, US business activity remains well in expansion territory, lending further support to the ongoing view of US 'exceptionalism' and reinforcing the Fed's cautious stance.
A significant upside surprise in both prints would likely bolster the US Dollar by confirming the idea of a healthy economy, hence reinforcing the Fed's cautious stance, according to reports from S&P Global. However, analysts warn that further losses in EUR/USD should not be ruled out, particularly following the break below the critical 200-day SMA above 1.1620. If bulls manage to regain the upper hand, the provisional 55-day and 100-day SMAs at 1.1526 and 1.1542 respectively are expected to offer initial resistance prior to the more relevant 200-day SMA. Once the pair clears the latter, the next target emerges at the August top at 1.1711. Alternatively, the continuation of selling pressure should meet initial support at the monthly floor of 1.1353 (July 28), prior to the 2026 bottom at 1.1324 (June 24).
Momentum indicators also favour extra declines as the Relative Strength Index (RSI) approaches the 31 level and the Average Directional Index (ADX) near 29 is indicative of a forceful trend, as noted by Pablo Piovano, Senior Analyst at FXStreet. The continuation of selling pressure should meet initial support at the monthly floor of 1.1353 (July 28), prior to the 2026 bottom at 1.1324 (June 24). These technical levels provide crucial reference points for currency traders ahead of the PMI release. The S&P Global Manufacturing PMI serves as a leading indicator gauging business activity in the US manufacturing sector, with survey responses reflecting changes from the previous month and anticipating trends in official data series such as GDP, industrial production, employment and inflation.
Upcoming reports on employment and inflation are poised to influence expectations around interest rate hikes, subsequently impacting the US stock market. The monthly employment report, due on October 2, will be the main event for Wall Street, with a key inflation gauge also in focus. Investors are scanning for implications for the Federal Reserve, which began raising interest rates this month for the first time in three years to fight high inflation. As per The Economic Times, analysts anticipate the payrolls report will indicate job growth, which could directly sway Federal Reserve policy. Should job numbers surpass predictions, immediate market reactions may reflect rate hike anxieties, with Fed Funds futures on Thursday suggesting a greater than 60% chance the central bank hikes at its next meeting in October. Wednesday's monthly read of the personal consumption expenditures price index (PCE), closely followed by the Fed, will offer insight into inflation trends, with the core PCE index increasing 3.3% in the 12 months through July, well above the central bank's 2% target.
