Release Explanation: As an indicator of economic performance the PMI has the ability to easily affect currency valuations as Institutions re-align existing positions, or build new, on the strength of these reports. It measures the activity level of Purchasing Managers, who are surveyed on production, employment, inventories, orders, and delivery data. The PMI is split into reads on Manufacturing, Service, and Construction industries. A read over 50 denotes growth.
Trade Desk Thoughts: The Purchasing Managers Index shows the industrial sector contracted in Switzerland for the sixth consecutive month. The PMI number was released at 32.6, versus analyst’s estimates of 34.8. The Swiss PMI confirms that the economy is taking a similar path as the Euro-area and the U.S. economies, which are in recession. The index sits at multi-year lows, showing that inflationary pressures are almost zero.
Forex Technical Reaction: The swissy gained 55 pips in the overnight session, testing TheLFB R1.