US Flash PMI, US Dollar, Russia, Ukraine, Inflation – Talking Points
- March Flash PMI 58.5 vs 56.3 est.
- USD relatively unchanged below 99.00
S&P Global revealed that its survey of business activity surged to an 8-month high on the back of robust demand for goods and services. The survey reading came in at 58.5, surpassing the 55.9 reading from February. This also represents the highest print since July 2021. Readings above 50 represent growth, while sub-50 prints indicate a contraction of economic activity. The strong report will be welcomed by policymakers, who have battled concerns lately that a recession may be ahead as the Fed looks to pivot away from pandemic-era policy. Warning signs have started to flash, with parts of the yield curve beginning to invert. For more on that, please click here.
US Economic Calendar
Courtesy of the DailyFX Economic Calendar
The survey highlighted that companies continue to worry about persistent inflation, as labor and input costs continue to rise. Raw material and energy prices continue to weigh on sentiment, while Covid lockdowns across China could potentially exacerbate supply chain issues. Expectations for the future were hampered by the ongoing Russia-Ukraine conflict, which continues to weigh on global growth forecasts. According to the survey, businesses continue to worry about steady increases to the cost of living, as households will have less disposable income to put back into the economy.
Following the release of the survey, the US Dollar Index (DXY) continued to tread water below the 99.00 threshold. The Dollar basket has been buoyed by Euro weakness, as EURUSD has traded lower in 4 of the last 5 sessions. During Thursday’s session, price has been propped up by support around 99.70, which could see the Greenback make a move for the 99.00 psychological level. US Treasury yields remain elevated across the curve on Thursday, which could continue to support USD strength.
US Dollar Index (DXY) 1 Hour Chart
Chart created with TradingView
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— Written by Brendan Fagan, Intern
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