Market Data 
- The S&P Global advanced PMIs for April are seen worsening further.
- Markets expect the Federal Reserve to cut rates in June by 25 bps.
- EUR/USD keeps the trade in the area of three-year highs past 1.1500.
This Wednesday, S&P Global will unveil its preliminary April Purchasing Managers’ Indices (PMIs) for the United States, drawing on surveys of senior private sector executives to offer an early read on economic momentum.
The report comprises three measures — the Manufacturing PMI, the Services PMI and the Composite PMI (a weighted blend of the two) — each calibrated so that readings above 50 denote expansion and those below 50 signal contraction. Published well ahead of many official statistics, these monthly snapshots assess everything from output and export trends to capacity utilization, employment and inventory levels, providing one of the first indicators of the economy’s direction.
In March, the Composite PMI came in at 53.5, improving from the previous month’s 51.6 reading. According to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, “The strong start to the year for US manufacturers has faltered in March. A combination of improved optimism surrounding the new administration and the need to front-run tariffs had buoyed the goods-producing sector in the first two months of the year, but cracks are now starting to appear. Production fell for the first time in three months in March, and order books are becoming increasingly depleted.”
What can we expect from the next S&P Global PMI report?
Investors are bracing for a modest pullback in April’s flash Manufacturing PMI, expected to slip from 50.2 to 49.4, while the Services PMI is forecast to ease from 54.4 to 52.8.
Although a slight downturn in factory output may not alarm markets, any resilience — or rebound — above the 50 threshold could soothe lingering growth concerns, especially if service sector momentum holds firm.
Investors will be zeroing in on the PMIs’ granular inflation and employment gauges. In his latest comments, Fed Chair Jerome Powell underscored the Fed’s deliberate approach to restarting its easing cycle, warning that anchoring consumer price expectations remains paramount amid mounting uncertainty over President Trump’s tariff crusade.
A marked surprise in the services PMI — paired with manufacturing’s return to expansion — would likely give the US Dollar a boost. Meanwhile, evidence of rising input costs in services alongside robust job gains would cement bets on a “higher‑for‑longer” Fed. Conversely, signs of easing price pressures and lackluster private sector hiring could rekindle hopes for fresh monetary relief — and weigh on the Greenback.
When will the March flash US S&P Global PMIs be released, and how could they affect EUR/USD?
The S&P Global Manufacturing, Services and Composite PMIs report will be released on Wednesday at 13:45 GMT and is expected to show US business activity extending the loss of momentum observed since the turn of the year.
Ahead of Wednesday’s PMI flash readings, Pablo Piovano, Senior Analyst at FXStreet warns that a bullish turn in EUR/USD could see spot challenge its YTD peak of 1.1572 (April 21), ahead of the October 2021 high at 1.1692 (October 28), and the September 2021 top at 1.1909 (September 3).
Conversely, Piovano notes that occasional bearish moves should not meet any support of relevance until the critical 200-day Simple Moving Average (SMA) at 1.0762, which reinforces the weekly trough at 1.0732 (March 27).
“While above the 200-day SMA, the pair’s bullish stance should remain unchanged”, Piovano adds.
Technical indicators still paint a constructive picture, although they warn of a potential correction in the pipeline: While the Average Directional Index (ADX) surpasses the 51 level, indicative of a strong trend, the Relative Strength Index (RSI) well in the overbought region above 75 hints at the idea that a probable “technical correction” may be in the offing, Piovano concludes.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Economic Indicator
S&P Global Composite PMI
The S&P Global Composite Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging US private-business activity in the manufacturing and services sector. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for USD.
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Last release: Thu Apr 03, 2025 13:45
Frequency: Monthly
Actual: 53.5
Consensus: 53.5
Previous: 53.5
Source: S&P Global
