US ISM Manufacturing PMI Future Data Could Indicate US Economic Trends Ahead

US ISM Manufacturing PMI Future Data Could Indicate US Economic Trends Ahead

The Institute for Supply Management (ISM) plans to publish the United States Manufacturing Purchasing Managers Index (PMI) today at 15:00 GMT. The forecast is 46.9, a little higher compared to the previous reading, which was 46.5, but still below the critical 50-point marker showing expansion.

This index, based on responses from over 400 companies across a range of industries, measures business activity and sentiment in the manufacturing sector.

Should PMI be above 50, this would give some strength in manufacturing that may increase the appreciation of the US dollar value. But below 50 might support fears of decline and even contraction in the industry and have implications for investors' morale as well as on currency value.

The data may also be reflected in Federal Reserve policy forecasts. If the pace of activity in manufacturing shows increases, it may temper speculations for further easing. Otherwise, a weak reading may have supported increased calls.

Markets Await ECB President Lagarde's Speech for Policy Clues

European Central Bank (ECB) President Christine Lagarde will be delivering a significant speech today at 10:00 GMT. Her speech is one of the major official voices from the ECB, and it is watched closely by analysts and market participants for indications of monetary policy moves by the central bank.

Should Lagarde indicate that the direction of policy will be tighter, like in the form of increased interest rates or less asset purchasing, then market confidence in the euro might improve short term. If, however, her rhetoric leans more towards continued easing or suggests problems with economic recovery, the euro could come under pressure.

Investors will look at her tone and particular words for an indication of the direction of the future economic agenda, inflationary targets, and growth expectations. Her remarks may influence market expectations, but it is still up to the market and the speech she gives in accordance with available economic data and market mood at the time.