US dollar is seeing significant purchasing in the European session on Monday.
The US Dollar (USD) strengthened on Monday, trading at 101.00, following preliminary S&P Global and Hamburg Commercial Bank (HCOB) Purchase Managers Index (PMI) data painted a bleak image for France, Germany, and the broader Eurozone. The drop in activity indicates problems ahead and turns the negative focus to Europe. The Greenback is seeing a flight to safety away from the Euro, which is hemorrhaging on all fronts.
European PMIs fell in September, while markets anticipate US PMIs on Monday.
Regarding the economic data Traders will be able to compare PMIs from Europe and the United States. The S&P Global PMIs for the United States (US) will be publishe before of the US trading session, with the Services component being the most relevant. With practically all PMI indices in Europe in decline, it appears that Europe headed for a recession, whilst the United States is still experiencing robust activity.
Daily Market movers: US Dollar Index rises and reclaims 101.00 in early Monday trading.
The main event this Monday will be the preliminary release of US S&P Global PMIs for September.
Services data predicted to fall slightly to 55.2 from 55.7 before.
Manufacturing predicted to witness a minor uptick, though it continues to decrease at 48.5. That is slightly better than August’s 47.9.
The Composite number stood at 54.6 in August, with no prognosis given.
US Federal Reserve speakers will shed information on the present monetary policy stance:
At 12:00 GMT, Raphael Bostic, President of the Federal Reserve Bank of Atlanta, gave a virtual speech regarding the US economic prospects at the European Economics and Financial Centre’s Distinguished Speakers Seminar at the University of London. Bostic indicated that he supports a 50 basis point rate drop, but did not specify the scale of the future move.
Around 14:15 GMT, Federal Reserve Bank of Chicago President Austan Goolsbee delivers a speech discussing monetary policy and the US economy at the annual The Association of State Treasurers is convening in Chicago.
Around 17:00 GMT, Federal Reserve Bank of Minneapolis President Neel Kashkari takes part in a Q&A session presented by the Greater Kansas City Chamber of Commerce at the Science Museum of Minnesota.
Equity markets in Europe are sliding as a result of the poor PMI data for Germany, France, and the rest of the Eurozone. Meanwhile, US futures are being driven down ahead of the US trading session.
According to the CME Fedwatch Tool, there is a 50.6% chance of a 25-basis-point rate decrease at the next Fed meeting on November 7, and 49.4% expect another 50-basis-point cut.
The 10-year benchmark rate in the United States is currently trading at 3.74%, close to the peak set last week of 3.76%.
