US S&P Global July flash manufacturing PMI at 49.5, composite at 54.6, services at 55.2.

US S&P Global July flash manufacturing PMI at 49.5, composite at 54.6, services at 55.2.

The US S&P Global July flash PMI data, released today, indicates a mixed bag of economic activity. The manufacturing PMI reading came in at 49.5, signaling a contraction in the sector, while the composite PMI stood at 54.6, and the services PMI was at 55.2, indicating expansion.

The manufacturing PMI, at 49.5, marks a slowdown compared to the previous month, suggesting that the sector is contracting. This is likely due to ongoing global trade uncertainty and policy changes, as seen in the UK's Autumn Budget [1].

The composite PMI, at 54.6, shows that overall business activity is expanding, albeit at a moderate pace. This is supported by the services PMI, which rose to 55.2, indicating strong activity in the sector. However, the manufacturing PMI's contraction may suggest a broader slowdown in the economy.

Investors are also keeping an eye on the UK's Retail Sales data for June, which will be released on Friday. The preliminary UK PMI report for July showed that the services sector rose at a moderate pace, while the manufacturing sector contracted [1].

Meanwhile, the Federal Reserve (Fed) is expected to leave interest rates steady next week. According to the CME FedWatch tool, the Fed is almost certain to keep rates in the current range of 4.25%-4.50% [3].

The US Dollar (USD) has been underperforming as demand for safe-haven assets diminishes, with hopes that the US and EU will finalize a trade agreement [2]. An EU-US deal confirmation would diminish fears of damage to the global trade flow.

Technical analysts are also watching the Pound Sterling (GBP), which faces selling pressure against the USD. The GBP/USD pair has been correcting to 1.3540, with the near-term trend remaining uncertain as it struggles to return above the 20-day Exponential Moving Average (EMA) [1].

The next major trigger for the USD will be the monetary policy announcement by the Fed on Wednesday. Investors will keenly watch Fed Chair Jerome Powell’s commentary on the monetary policy guidance amidst fears that tariffs imposed by US President Donald Trump could accelerate inflationary pressures [3].

In conclusion, the US S&P Global July flash PMI data shows a mixed bag of economic activity, with the manufacturing sector contracting while the composite and services sectors expand. Investors will continue to monitor the economic data and the Fed's monetary policy announcement.

References:
[1] https://www.fxstreet.com/news/pound-sterling-trades-lower-ahead-of-flash-uk-us-pmi-data-202507240748
[2] https://www.nasdaq.com/articles/ftse-100-nearly-1-encouraging-earnings-updates
[3] https://www.morningstar.com/news/dow-jones/202507245622/trump-to-tour-fed-ramping-up-pressure-campaign-on-powell-ecb-rate-decision-in-focus