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Contractions In The European Manufacturing Sector (PMI Index)

Contractions In The European Manufacturing Sector (PMI Index)| FXMAG.COM
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Table of contents

  1. Japanese data
    1. Spanish Manufacturing PMI (Sep)
      1. Germany Manufacturing Purchasing Managers Index
        1. EU Manufacturing PMI
          1. UK Manufacturing PMI
            1. U.S. The ISM Manufacturing Purchasing Managers Index
              1. FOMC Member Speech
                1. Summary

                  The beginning of the new month is rich in reports on the Purchasing Managers Index (PMI). The indicator measures the activity level of purchasing managers in the manufacturing sector.

                  Japanese data

                  At 1:50 CET the reports from Japan for the third quarter came in. The first one concerned the relative level of general business conditions in the manufacturing sector. The Tankan Large Manufacturing Index is decreasing from quarter to quarter. The current reading is at 8 and has dropped from 9. This time the index was expected to increase to 11, but a lower than expected level is taken to be negative for the JPY.

                  contractions in the european manufacturing sector pmi index grafika numer 1contractions in the european manufacturing sector pmi index grafika numer 1

                  Source: investing.com

                  The second report is the Japan Tankan Large Non-Manufacturers Index, i.e. the relative level of general business conditions among large businesses, excluding the manufacturing industry. Contrary to the Tankan Large Manufacturers Index, it is in an upward trend and this time it rose from 13 to 14. This quarter (Q3) was expected to remain at its previous level (13), but the result increased. This is a positive reading.

                  contractions in the european manufacturing sector pmi index grafika numer 2contractions in the european manufacturing sector pmi index grafika numer 2

                  Source: investing.com

                  Spanish Manufacturing PMI (Sep)

                  Spain, as one of the two countries in Europe, today publishes the PMI report.

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                  The Spain Manufacturing PMI index is expected to reach 49.2. The last two readings were below 50 and indicated a contraction in this sector. The first reading below 50 took place in July and it hit 48.7, the lowest reading so far this year. Another reading in August was at the level of 49. 9. This reading was higher than the previous one, which means that the situation in the sector has improved and the result has come close to the level of 50.

                  If the current reading is higher than the last one and than the expected level, we can expect improvement of the situation in this sector and it will be a positive factor for the euro zone currency.

                  Germany Manufacturing Purchasing Managers Index

                  Germany Manufacturing PMI has been in a downward trend since March. Only since the reading for July is below 50. The reading for August was at 49.1 and the last reading was 48.3. The last reading is expected to hold this time. Nevertheless, it will still be perceived as a contraction in the sector. Only the next reading can show whether the bad trend will stop or reverse.

                  EU Manufacturing PMI

                  Today also the European Union publishes a report on this indicator.

                  The Eurozone Manufacturing Purchasing Managers Index showed a close correlation with the level of the German PMI, and just like the German index has dropped below 50 since July. The current reading is expected to drop to 48.5. It will be lower than August's 49.6. Fortunately for the European index, not only the situation of the German economy affects the results, but also countries such as fraction or Spain.

                  contractions in the european manufacturing sector pmi index grafika numer 3contractions in the european manufacturing sector pmi index grafika numer 3

                  Source: investing.com

                  UK Manufacturing PMI

                  The UK will also publish its Manufacturing Purchasing Managers Index report today. The result of 48.5 is expected to continue and this will be an improvement in the sector as the result for the month of August was at 47.3. The August result was the lowest of the year and the increase from this level may be positive for the British economy.

                  contractions in the european manufacturing sector pmi index grafika numer 4contractions in the european manufacturing sector pmi index grafika numer 4

                  Source: investing.com

                  U.S. The ISM Manufacturing Purchasing Managers Index

                  In the second half of the day, America also publishes a report. Contrary to the European results, the U.S. The ISM Manufacturing Purchasing Managers Index has not dropped below 50. Nevertheless, it has continued its downward trend since April. It is expected to drop from 52.8 to 52.2 this time. This would be the lowest level of the year.

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                  This is not yet a level suggesting a contraction in this sector, but the continued downtrend indicates a worsening situation.

                  contractions in the european manufacturing sector pmi index grafika numer 5contractions in the european manufacturing sector pmi index grafika numer 5

                  Source: investing.com

                  FOMC Member Speech

                  At the end of the day, FOMC member John C. Williams will have a speech at exactly 21:10 CET.

                  Summary

                  • 1:50 CET Japan Tankan Large Manufacturers Index (Q3)
                  • 1:50 CET Japan Tankan Large Non-Manufacturers Index (Q3)
                  • 9:15 CET Spanish Manufacturing PMI (Sep)
                  • 9:55 CET German Manufacturing PMI (Sep)
                  • 10:00 CET EU Manufacturing PMI (Sep)
                  • 10:30 CET UK Manufacturing PMI (Sep)
                  • 16:00 CET ISM Manufacturing PMI (Sep)
                  • 21:10 CET FOMC Member Williams Speaks

                  Source: https://www.investing.com/economic-calendar/


                  Kamila Szypuła

                  Kamila Szypuła

                  Writer

                  Kamila has a bachelors degree in economics and a master's degree in finance and accounting, specializing in banking and financial consulting

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