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Ivey Purchasing Manager Index (SEP)

By:   Crown Forex
  • 06-10-2008
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Previous       51.5
Forecast       51.0

Definition     

Is a widely used indicator in industrialized nations; measures the health of the manufacturing and the services sector. The diffusion index is compiled through a survey for purchasing managers covering a wide range of sectors.

The questionnaires cover basically five major indicators new orders, inventory levels, production, supplier deliveries, and employment environment.

The indicator is released in the United Kingdom, Germany, and the Euro Zone as well. Digesting the index generally a reading above 50 resembles expansion and below the marginal 50 level it resembles the opposite with is contraction.

 
General Effect     

In General, the importance of the Purchasing Manager Index is considered significant, and appears obviously on currencies exchange market, so at the point when this index or any of its components show an increasing value, that will cause a rising of production quantity which is considered a basic factor to achieve required economic growth. Then the effect of this factor supports the country's currency pushing it to appreciate.

On the other hand and as result of this economic growth, inflation factor with time might increase under current economic conditions which accompanies growth, which starts to rise prices levels, which reduces  the major utility of this economic improvement.

In order to confront price stability threats the government starts executing different monetary policies in purpose to stimulate and ensure robust economic growth levels.

The PMI has the same effect on Industrial companies' shares included in the stock market indices.

Best Case     An improvement in the PMI reading will indicate that the sectors are picking up in Canada as consumer demand remains strong suggesting expansion in the sector

Worst Case     A reading below 50 shows contraction in the sector that has been performing well where the reason could be waning demand as consumers decide to cut back on spending

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Crown Forex
CROWN FOREX SA, located at St-Hubert 38, 2854 Bassecourt, P.o.box 247, Switzerland, is fully regulated as a financial intermediary under Swiss federal law on the prevention of money laundering (LBA, MLA). Our company is also affiliated with the ARIF association, thus overseen by the Swiss federal de

DISCLAIMER:

The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness.  I am not liable for any losses or damages, monetary or otherwise that result.  I recommend that anyone trading currencies, gold, silver &energies should do so with caution and consult with a broker before doing so.  Prior performance may not be indicative of future performance. Currencies, gold, silver &energies  presented should be considered speculative with a high degree of volatility and risk


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