Manufacturing PMI is forecast to rise to near expansion as the pandemic collapse is projected to be erased in June. Good PMI numbers will further ease the recent risk-aversion dollar rally, Joseph Trevisani, an analyst at FXStreet, reports.
Key quotes
“The purchasing managers’ index from the Institute for Supply Management (ISM) is forecast to rise to 49.5 in June from 43.1 in May. This would be the best score since the government ordered shuttering drove PMI from 50.9 in January to 41.5 in April.”
“The employment index is expected to climb to 43.0 from 32.1 in May and 27.5 in April which was the second-lowest reading in the 72 years of the survey. The price paid index is predicted to rise to 43 in June from 32.1. New orders are expected to gain 36.1 from 31.8 in May.”
“The ingredients are in the mix for a strong ascent of the US manufacturing sector. The China trade deal remains intact and in the best interests of both nations. Americans appear disposed to resume a good portion of their normal spending habits. The economy in most of the country has been opened and the new restrictions in Texas, Florida and other places have been limited to compare to those of March and April.”
“Equities just closed their best quarter in decades anticipating the recovery and reversing the panic decline of March. The Dow rose 17.8% it best since 1987, the S&P 500 gained nearly 20%, its best since 1998 and the Nasdaq jumped 30.6%, its strongest since 1999. Meanwhile, the dollar gave back some of its two-week rally on Monday as consumer confidence in June rose more than anticipated.”
“The wildcard in the progress of the second wave of the pandemic. If it again forces widespread closures the economy will retract all of its improvement of the last two months.”
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