Look out traders! On Friday the 23rd of July, the Euro will be printing their monthly PMI data so here's what to expect...
The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. It consists of a diffusion index, which essentially summarises market conditions viewed by purchasing managers if they are expanding, staying the same or contracting. The PMI aims to provide information about current and future business conditions to company decision-makers, analysts, and investors.
The headline PMI is a number from 0 to 100. A PMI above 50 represents an expansion when compared with the previous month. A reading below 50 represents a contraction, and a reading at 50 indicates no change compared to the previous month. The further away from 50, the greater the level of change.
As a whole, the Euro has expanded significantly in their PMI readings. The Eurozone is doing very well combatting the pandemic and the crisis it's caused on their economy. However, we're now beginning to see a significant recovery.
We're expecting to see another round of potential declines in Manufacturing PMI's all round, however we're also expecting to see another round of potential inclines in Service PMI's all round too. This could potentially mean we won't see a very one-sided direction following the results as half is expected to be good news, and the other half is expected to be bad news.
If the results come out as expected, I'm expecting high volatility in both directions. As mentioned, this is mainly because we're expecting a decline in Manufacturing PMI but an incline in Service PMI's. So it's good news mixed with bad news. There likely will be spikes, but I'm expecting this is both directions. I would suggest looking out for the released actual numbers before deciding to trade this event.
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