US S&P PMI Preview: Business activity expected to remain firm in November | FXStreet
S&P Global will release on Friday the November flash Purchasing Managers’ Indices (PMIs) for most major economies, including the United States (US). These surveys of top private sector executives provide an early indication of the business sector’s economic health.
Market participants anticipate that the Global Services PMI will print at 54.8, matching the October reading, while Global Manufacturing output is expected to print at 52, slightly below the 52.5 reading of the previous month. Finally, it is worth noting that the Composite PMI printed at 54.6 in October.
The US is coming from the longest government shutdown in its history, which means little macroeconomic data has been released in the last couple of months. Indeed, the country kick-started reporting on Thursday, but offered the September Nonfarm Payrolls (NFP) report, which showed the economy added 119,000 new positions in the month, better than the 50,000 expected. The Unemployment Rate increased to 4.4%, worse than the previous 4.3%, although the Participation Rate increased from 62.3% to 62.4%, partially offsetting the uptick in the unemployment rate. As a result, markets turned optimistic, with the US Dollar (USD) under mild near-term selling pressure.
Still, the market’s hunger for economic-related data ahead of the Federal Reserve (Fed) December monetary policy meeting could see the S&P Global PMIs having a wider-than-usual impact on the US Dollar (USD).
S&P Global separately reports manufacturing activity and services activity through the Manufacturing PMI and the Services PMI. Additionally, they present a weighted combination of the two, the Composite PMI. Generally speaking, a reading of 50 or more indicates expansion, while below the threshold, the indexes indicate contraction.
The report has two versions, a preliminary estimate and a final revision, which comes around two weeks later. These preliminary versions or flash estimates tend to have a broader impact on the US Dollar.
What can we expect from the next S&P Global PMI report?
The anticipated figures, while below the previous ones on the manufacturing sector, still indicate healthy economic progress in the world’s largest economy.
With that in mind, figures in line with expectations will be viewed as positive news, particularly in relation to the Manufacturing PMI. Upbeat numbers could boost the market’s optimism and temporarily weigh on the USD demand, but had no material impact on the upcoming Federal Reserve monetary policy decision, unless the figures are extremely disappointing, an unlikely scenario.
Beyond the headline readings, the reports include sub-indices on employment and inflation, closely watched by market players. In this particular case, the figures could have a more relevant impact than the headline figure, as inflation and employment levels are at the centre of the Fed’s decision. Much worse-than-anticipated data should result in renewed speculation of a Fed cut in December, resulting in a weaker USD across the FX board.
When will the November flash US S&P Global PMIs will be released and how could they affect EUR/USD?
The S&P Global Manufacturing, Services, and Composite PMIs reports will be released at 14:45 GMT on Friday, and as previously noted, are expected to show that US business activity continued to expand in November.
Ahead of the release, the USD is shedding ground against most major rivals amid a risk-on environment following the September NFP report.
Valeria Bednarik, FXStreet Chief Analyst, notes: “The EUR/USD pair bounced modestly from near the 1.1500 level posted early on Thursday, as risk appetite undermines demand for the Greenback in the near-term. On a weekly basis, however, the pair remains on the bearish side.”
Bednarik adds: “Technical readings in the daily chart suggest EUR/USD could extend its slide. A bearish 20 Simple Moving Average (SMA) is currently providing dynamic resistance at around 1.1570, while extending its slide below a flat 100 SMA, usually a sign of mounting selling pressure. At the same time, the Momentum indicator heads nowhere around its midline, in line with the recent absence of directional strength. Support lies at 1.1470 ahead of the 1.1400 region, where the pair met buyers in July. Gains beyond the aforementioned 1.1570 expose the 1.1630 price zone, with additional gains unlikely in the current scenario.”
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Economic Indicator
S&P Global Composite PMI
The S&P Global Composite Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging US private-business activity in the manufacturing and services sector. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for USD.
Next release:
Fri Nov 21, 2025 14:45 (Prel)
Frequency:
Monthly
Consensus:
–
Previous:
54.6
Source:
S&P Global