S&P Global PMIs set to show ongoing US economic strength in July
- The S&P Global flash PMIs for July are seen improving further, suggesting the US economy continued to expand.
- Markets expect the Federal Reserve to keep its interest rates unchanged at the end of the month.
- EUR/USD manages to regain some pace and flirts with the 1.1700 area.
S&P Global will release on Thursday its preliminary July Purchasing Managers' Indices (PMIs) for the United States, based on surveys of top private sector executives, to provide an early indication of economic momentum.
The report includes three measures: the Manufacturing PMI, the Services PMI, and the Composite PMI (a weighted combination of the two), each calibrated such that numbers above 50 indicate growth and readings below that threshold indicate contraction.
These monthly snapshots, released far ahead of many official figures, analyse everything from production and export patterns to capacity utilisation, employment, and inventory levels, offering some of the earliest signs of the economy's direction.
The Composite PMI ticked down marginally to 52.9 in June from 53.0 the previous month. According to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, "The US service sector reported a welcome combination of sustained growth and increased hiring in June but also reported elevated price pressures, all of which could add to pressure on policymakers to remain cautious with regard to any further loosening of monetary policy."
What can we expect from the next S&P Global PMI report?
Investors anticipate a little increase in July's flash Manufacturing PMI from 52.0 to 52.5, while the Services PMI is projected to rise from 52.9 to 53.0.
Although a minor decline may not scare markets, any resilience – or rebound – above the 50-point level might alleviate lingering economic fears, particularly if service sector momentum remains strong.
Investors will focus on the PMIs' granular inflation and employment measures. Fed Chair Jerome Powell has said that inflation is projected to accelerate in reaction to US tariffs, causing the Federal Reserve (Fed) to adopt a cautious tone. Despite some Fed officials suggesting a quarter-point rate decrease as early as later this month, the market consensus expects the Fed to stay on the sidelines.
A significant upside surprise in the services PMI, along with a strong print from the manufacturing gauge, would likely bolster the US Dollar by confirming the idea of a healthy economy, hence supporting the Fed's conservative attitude.
In contrast, evidence of easing pricing pressures and weak private sector hiring might reignite prospects for more monetary easing, weighing on the US Dollar.
When will the July flash US S&P Global PMIs be released, and how could they affect EUR/USD?
The S&P Global Manufacturing, Services, and Composite PMIs report will be released at 13:45 GMT and is expected to show US business activity extending the gain of momentum observed in the last readings.
Ahead of the release, Pablo Piovano, Senior Analyst at FXStreet, warns that the continuation of the ongoing recovery of the EUR/USD pair could see it challenge its yearly peak of 1.1830 (July 1), ahead of the September 2021 high at 1.1909 (September 3), and the critical milestone at 1.2000.
Alternatively, Piovano notes that the resurgence of the selling pressure should meet initial support at the monthly floor of 1.1556 (July 17), prior to the interim 55-day Simple Moving Average (SMA) at 1.1491, and the weekly base of 1.1445 (June 19).
“While above the 200-day SMA at 1.0910, the pair’s bullish stance should remain unchanged,” Piovano adds.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
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.
Read more.Last release: Thu Jul 03, 2025 13:45
Frequency: Monthly
Actual: 52.9
Consensus: 52.8
Previous: 52.8
Source: S&P Global
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