This week brings the first major activity checks after the Fed’s and the ECB’s decisions. The eurozone and the US Manufacturing PMIs will show whether higher rates are cooling the industry, while the US GDP would confirm how resilient the growth remains. Together, these releases may set the tone for the USD, the euro, and risk sentiment.
EUR: Eurozone Manufacturing Purchasing Managers Index (PMI)
June 23, 11:00 MT time
Forecast: 52.0. Previous: 51.6.
This report will be one of the first major pieces of macroeconomic data released after the European Central Bank’s recent rate decision. It will offer investors an early indication of how manufacturers are coping with higher borrowing costs and persistent energy-driven inflation. A reading above 50 continues to signal expansion, although growth has moderated in recent months as elevated input costs and weaker external demand weigh on activity.
Markets expect the index to improve modestly, suggesting that the sector remains resilient despite a challenging backdrop. Traders will pay particular attention to new orders, export demand and pricing components to assess whether the ECB’s hawkish stance is beginning to slow economic momentum.
A stronger-than-expected release could reinforce expectations that policymakers will keep rates elevated for longer, potentially supporting the euro, whilst a weaker print may revive concerns over slowing growth and limit further gains.
Affected instruments: EURUSD, EURGBP, EURJPY, and other EUR-pairs
USD: US Manufacturing Purchasing Managers Index (PMI)
June 23, 16:45 MT time
Forecast: 55.1. Previous: 55.1.
The US Manufacturing PMI represents the first comprehensive snapshot of business activity following the Federal Reserve’s latest policy meeting and the first chaired by Kevin Warsh. Markets will be looking beyond the headline figure to determine whether the Fed’s restrictive stance is beginning to cool the industrial economy or whether the local manufacturing continues to outperform expectations.
Consensus expects the index to remain unchanged at 55.1, comfortably above the 50-point expansion threshold and close to multi-year highs. Continued strength would reinforce the narrative of a resilient U.S. economy, whilst also suggesting that inflationary pressures may remain persistent.
A stronger reading could lift the USD, whereas any unexpected slowdown may encourage speculation that monetary policy is becoming sufficiently restrictive to slow activity later this year.
Affected instruments: EURUSD, GBPUSD, USDJPY, and other USD-pairs
USD: US Gross Domestic Product (GDP) QoQ
June 25, 15:30 MT time
Forecast: 1.6%. Previous: 1.6%.
The final estimate of first-quarter US GDP will provide investors with another important assessment of economic momentum only days after the Federal Reserve meeting. Although revisions are generally less market-moving than the advance estimate, the release remains highly relevant because it confirms whether the world’s largest economy continues to expand despite elevated interest rates and persistent inflation.
Markets expect the growth rate to remain unchanged, indicating a moderate but stable pace of expansion. Particular attention will be paid to consumer spending, business investment and exports, all of which have helped overcome tighter financial conditions.
A stronger revision would strengthen the argument that the US economy can withstand higher rates for longer. Conversely, any downward revision could revive expectations of policy easing later in the year and increase volatility across the board
Affected instruments: EURUSD, GBPUSD, USDJPY, and other USD-pairs
