{"id":159128,"date":"2019-11-05T09:09:17","date_gmt":"2019-11-05T14:09:17","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=159128"},"modified":"2019-11-05T09:09:17","modified_gmt":"2019-11-05T14:09:17","slug":"ism-non-manufacturing-pmi-to-rebound-in-october","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/11\/ism-non-manufacturing-pmi-to-rebound-in-october\/","title":{"rendered":"ISM Non-Manufacturing PMI To Rebound In October"},"content":{"rendered":"
November 5, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

The monthly non-manufacturing PMI report from the Institute of Supply Management will be coming out today.<\/p>\n

According to economists, median estimates point to a modest increase in the index.<\/p>\n

Estimates show that the ISM non-manufacturing PMI will rise to 53.5 in October, after slipping to 52.6 in the month before.<\/p>\n

\"\"<\/a>
U.S. Non-manufacturing PMI, September 2019<\/figcaption><\/figure>\n

The non-manufacturing PMI report will be closely watched. The reason behind this is that the manufacturing PMI for\u00a0October fell further into contraction<\/a>. A weak print in the services or the non-manufacturing sector will spell trouble.<\/p>\n

Note that the Federal Reserve, in its monetary policy meeting last week, cut rates. But the central bank removed a key reference from its statement. Investors view this as the central bank pausing its rate cut cycle.<\/p>

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For the moment, officials believe that the US economy will pick up the pace. It expects that the current low interest rates will help revive the economy.<\/p>\n

But if the services PMI comes in weaker, then it would show some signs of trouble all around. The manufacturing PMI has been below the 50-level of the index for three straight months.<\/p>\n

The data for October saw the index missing estimates, but was still slightly better compared to the month before at 48.3.<\/p>\n

Both the manufacturing and non-manufacturing PMIs are leading indicators. Therefore, when these indexes slip below the 50-level, signaling contraction, it makes everyone take notice.<\/p>\n

The recent jobs report also saw a mixed bag. The unemployment rate ticked higher due to an increase in the participation rate. But the pace of job growth is slower, including wages.<\/p>\n

A Rebound?<\/strong><\/h2>\n

This will be the main question for market watchers. The ISM non-manufacturing PMI is fairly stable, comparing to the manufacturing sector.<\/p>\n

In August, the non-manufacturing index rose to 56.4. This was the third-best reading on the index this year. But following the gains in August, the index is steadily slipping.<\/p>\n

There are a number of factors behind the decline. The global economy is not at its best. Further to this, various global themes including the US-China trade war and\u00a0Brexit<\/a>\u00a0have kept the uncertainty alive in the markets.<\/p>\n

However, domestically, the US has managed to progress as far as the trade talks are concerned. This could mean that there is scope for the non-manufacturing PMI to rise. But given the overall slowdown in the economy, it would be hard to expect another solid print.<\/p>\n

As long as the services index does not disappoint by a strong margin, the markets will see a somewhat muted reaction. But on the other hand, a strong disappointing print will raise prospects on the Fed\u2019s decision.<\/p>\n

There is already some speculation that the central bank could be making a policy mistake. However, from the Fed officials\u2019 perspective, they need to see evidence of a slowdown in order to act more.<\/p>\n

The central bank has lowered rates three times this year already. And based on the previous monetary policy statement, there won\u2019t be any further rate cuts down the line.<\/p>\n

This could change depending on the PMI numbers today. If the services PMI unexpectedly falls below the 50-level on the index, then the markets could go wild and that could set off a risk-on sentiment, further strengthening it.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex The monthly non-manufacturing PMI report from the Institute of Supply Management will be coming out today. According to economists, median estimates point to a modest increase in the index. Estimates show that the ISM non-manufacturing PMI will rise to 53.5 in October, after slipping to 52.6 in the month before. U.S. Non-manufacturing PMI, […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-159128","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/159128","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=159128"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/159128\/revisions"}],"predecessor-version":[{"id":159135,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/159128\/revisions\/159135"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=159128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=159128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=159128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}