US Flash PMI beats expectations despite persistent inflation, tensions between Russia and Ukraine

US Flash PMI, US dollar, Russia, Ukraine, inflation – talking points

  • March Flash PMI 58.5 versus 56.3 estimated.
  • USD relatively unchanged below 99.00

S&P Global revealed that its record of business activity rose to an 8-month high due to strong demand for goods and services. The survey reading came in at 58.5, surpassing the February 55.9 reading. It also represents the highest pressure since July 2021. Readings above 50 represent growth, while sub-50 prints indicate a contraction in economic activity. The strong report will be welcomed by policymakers, who have recently expressed concern that a recession is imminent as the Fed wants to turn away from the pandemic era policy. Warning signs started flashing, with parts of the yield curve starting to turn around. For more on that, please click here.

US Economic Calendar

Courtesy of the techlives Economic Calendar

The survey highlighted that companies are still worried about persistent inflation as labor and input costs continue to rise. Raw material and energy prices continue to weigh on sentiment, while Covid constraints across China could potentially exacerbate supply chain issues. Future expectations have been hampered by the ongoing conflict between Russia and Ukraine, which continues to weigh on global growth forecasts. According to the survey, businesses remain concerned about steady increases in living costs, as households will have less disposable income to put back into the economy.

Following the release of the survey, the US Dollar Index (DXY) continued to trample water below the 99.00 threshold. The Dollar basket was supported by Euro weakness as EURUSD traded lower in 4 of the last 5 sessions. During Thursday’s session, the price was supported by support around 99.70, which could see the Greenback make a move for the 99.00 psychological level. U.S. Treasury yields continued to rise Thursday over the curve, which may continue to support USD strength.

US Dollar Index (DXY) 1 Hour Chart

US Flash PMI beats expectations despite persistent inflation, tensions between Russia and Ukraine

Chart created with TradingView

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— Written by Brendan Fagan, Intern

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