Manufacturing and services fell in contraction in Europe in the summer, while in the US manufacturing was holding up well until recently. Now, the manufacturing sector has fallen into contraction as well and the US dollar is moving lower after the flash S&P Global manufacturing and services reports were released. This adds further pressure on the FED to slow down and probably stall with rate hikes soon.

USD/JPY Daily Chart – The 100 SMA Turns into Resistance

The 100 SMA rejected the price yesterday 

The S&P Global Flash US Manufacturing and Services PMI for November 2022

• Manufacturing PMI for November 7.6 points versus 50.0 expectations.
• October manufacturing was 50.4 points
• Services PMI November 46.1 points versus 47.9 expected
• October services were 47.8 points
• Composite PMI 46.3 points versus 48.2 last month

From S&P Global:

“November saw a solid contraction in business activity across the US private sector, according to latest ‘flash’ PMI™ data from S&P Global. Lower output was seen across both manufacturing and service sectors amid increasingly steep downturns in demand. The overall fall in activity was the second-fastest since May 2020 as inflation, rising borrowing costs and economic uncertainty weighed on demand.”

They added on the composite index:

“The rate of contraction signalled for the composite output index was the sharpest since August and among the quickest since 2009. Demand conditions worsened as the fourth quarter progressed, with new orders across the private sector falling in November at the fastest pace since the initial pandemic wave in May 2020. With the exception of the early stages of the pandemic, the decrease in total new sales was the sharpest since 2009. Manufacturers and service providers alike recorded steeper declines in new business, with many firms stating that the impact of inflation and interest rates had led to greater hesitancy and postponements by customers in placing orders”

On the services PMI they said:

“The S&P Global Flash US Services Business Activity Index posted 46.1 in November, down from 47.8 in October. Excluding the initial pandemic phase in the first half of 2020, the rate of decline was the second-fastest on record. Panellists often stated that the impact of inflation and interest rates on customer disposable income had dented demand conditions.”

On the manufacturing PMI, they said:

“At 47.6, down from 50.4 in October, the S&P Global Flash US Manufacturing PMI signalled a renewed decline in operating conditions at manufacturers in November. The deterioration in the health of the sector was solid and the first since June 2020.”