Flash Manufacturing PMI might take a hit today

Flash Manufacturing PMI might take a hit today

Flash Manufacturing PMI is an expression of economic conditions and overall sentiment of the purchase managers across the economy. It is based on the survey responses taken by the purchasing managers, and it indicates the general direction of various industries.

It is released monthly, one week before the month’s end.

It has two components, released one week apart: Flash and Final. The Flash is the earliest release, and it has the most impact on the market. The way it is calculated is as follows: a figure above 50.0 indicates industry expansion. A value below 50 means a contraction. This indicator can be influenced by unpredicted events, as is the case now with the global Coronavirus pandemic.

In the Eurozone, the results were in line with expectations because severe measures were taken to stop the virus outbreak. For the previous month's release, the Flash for Germany is lower, but the good news is that it is bigger than the forecast, indicating a glimpse of optimism. For this month, a contraction to 45.7 has been released, as seen on forexfactory.com.

The French economy shows worrisome numbers, the PMI reaching the lowest value in 11 years, at 29.

Due to Coronavirus, the French and German economic activity is collapsing. According to Markit, no good news is in sight for these countries. "The unprecedented collapse in the PMI underscores how Germany is headed for a recession, and a steep one at that." The French GDP is expected to drop: “March saw a record rate of declines for services activity, while the manufacturing sector suffered to the greatest extent since the global financial crisis. Taken together, these declines suggest GDP is collapsing at an annualized rate approaching double digits.”

The usual market response to PMI release is a direct influence over the currency pairs concerned, as best seen in EUR/USD. At the press time, the EUR/USD pair is seen hovering around 1.0830, gaining 1% on the day.

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Sources: investing.com, forexfactory.com, forexlive.com, fxstreet.com

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The information presented herein is prepared by CAPEX.com and does not intend to constitute Investment Advice. The information herein is provided as a general marketing communication for information purposes only and as such it has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation.

Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance is not a reliable indicator of future results.