Last week, there were sharp swings in USDJPY, a decline in oil prices, and a surge in Tesla stock. What's next?
An index that will rock USD
What will happen?
The United States will publish the ISM Non-Manufacturing PMI on Thursday, January 6, at 17:00 GMT+2 (MetaTrader time).
Why is it important?
The index shows how managers estimate business conditions in the services industry. It’s better when this indicator is increasing. In addition, there is another thing to consider. Look at the indicator’s value: if it’s above 50, the services industry is expanding, and all is well. The industry is contracting if the ISM Non-Manufacturing index shows a reading below 50.0. The relation between the indicator and the US dollar is straightforward. The higher the ISM Non-Manufacturing index is, the better for the USD.
What happened last time?
On December 3, the ISM Non-Manufacturing index came out much higher than expected. The number was 69.1 versus the forecast of 64.9. As a result, USD/CAD rose from 1.2780 to 1.2840 during the several hours after the release.
How to trade on ISM Non-Manufacturing PMI?
Open the economic calendar a few days before the US Initial Jobless Claims release. How high is the forecast? Notice that the recent readings have been very high. As a result, it won’t be easy for the indicator to outmatch forecasts.
- If the actual figure exceeds the forecast, the USD will go up.
- If the actual figure misses the forecast, the USD will go down.
Instruments to trade: all the major pairs and XAU/USD
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Have a look at the key financial instruments on Monday, February 28. Geopolitics is currently on all news frontlines. Western nations escalated sanctions on Russia for the invasion of Ukraine.
The US Markit will publish Flash Manufacturing and Flash Services PMIs (purchasing managers' indices) on June 23 at 16:45 GMT+3.
The Fed Chair Jerome Powell will testify on the Semi-Annual Monetary Policy Report before the House Financial Services Committee on June 22-23 at 17:00 GMT+3.
Canada will publish Retail Sales and Core Retail Sales on June 21 at 15:30 GMT+3.