24thJanuary 2024Wednesday January 24this set to be a momentous...

24^thJanuary 2024

Wednesday

January 24this set to be a momentous day in the financial world, marked by a series ofmajor news releases anticipated to impact market movements significantly.France, Germany, and Great Britain are all scheduled to publish their FlashManufacturing PMI and Flash Services PMI data. Concurrently, the Bank of Canadawill announce its Overnight Rate, a key economic indicator. Alongside thesedevelopments, the United States will also release its Flash Manufacturing PMIand Flash Services PMI. Adding to the day's significance, the Bank of Canadawill hold a press conference, likely to provide further insights into its ratedecision and economic outlook.

EUR - French Flash ManufacturingPMI

This metric iscrucial for evaluating the economic landscape. Businesses often respond quicklyto changes in the market, and the perspectives of their purchasing managersprovide timely and pertinent information about a company's view of economicconditions. In the survey, around 750 purchasing managers are queried toevaluate the state of different business components, such as employment,production, new orders, prices, supplier deliveries, and inventories.

In December of2023, the HCOB France Manufacturing PMI had fallen to 42.1 from 42.9 in theprevious month, marking the lowest reading on record, aside from thepandemic-induced crash in the second quarter of 2022. This figure was a slightupward revision from the preliminary reading of 42. The decline pointed to the11th consecutive month of decreasing activity in French manufacturing. Thistrend was driven by slowing conditions in key markets and increasedinternational competitive pressures, which continued to suppress new orders. Asa result, manufacturing output contracted for the 19th consecutive month, andoutstanding orders decreased. The low demand for capacity led to reducedpurchasing levels and triggered a seventh consecutive month of job losses. Interms of pricing, a renewed decrease in input costs, coupled with intensifiedcompetition, compelled firms to lower their output charges. Looking back,French manufacturers had reported a consistent pessimism about the outlook for2024, although this sentiment had reached its lowest level in five months.

TL;DR

	Aspect	Detail
1	PMI Value (Dec 2023)	42.1
2	Previous Month's PMI Value	42.9
3	Comparison to Record Low	Lowest since pandemic in Q2 2022
4	Preliminary Reading	42.0
5	Consecutive Months of Decline	11
6	Cause of Decline	Slowing market conditions, increased international competition
7	Manufacturing Output Trend	Contracted for 19th consecutive month
8	Orders Status	Decreased
9	Demand for Capacity	Low, leading to reduced purchasing
10	Employment Trend	7th consecutive month of job losses
11	Pricing Changes	Decrease in input costs; firms lowered output charges due to competition
12	Outlook for 2024	Consistently pessimistic, though sentiment slightly improved in the past 5 months

The projected FrenchFlash Manufacturing PMI is expected to rise to 43, up from theprevious figure of 42.1.

The upcoming FrenchFlash Manufacturing PMI is scheduled for January 24th at 08:15 AM GMT.

The last time, the French Flash ManufacturingPMI was announced on the 15^th of December, 2023. You may findthe market reaction chart (EURUSD M5) below:

EUR – French Flash Services PMI

This metric iscrucial for evaluating the state of the economy. Businesses often respondquickly to changes in the market, and the views of their purchasing managersprovide highly current and pertinent information about the company'sperspective on economic conditions. In the survey, around 750 purchasingmanagers are queried to evaluate various aspects of business, such asemployment, production, new orders, prices, supplier deliveries, and inventorylevels.

In December2023, the HCOB France Services PMI rose to 45.7, marking its highest level infour months. This increase surpassed initial estimates and market forecasts,which had been set at 44.3, and was a notable improvement from November'sfigure of 45.4. Despite this rise, the reading indicated the seventhconsecutive month of economic contraction, primarily driven by weak demandconditions. Businesses experienced a decline in new orders for the eighthconsecutive month, although the rate of decline eased compared to November’sthree-year low. The backlog of orders saw a significant reduction, one of thefastest in over three years, while employment growth remained steady.

Regardingprices, the rate of input price inflation was the lowest since August 2021.However, the prices charged by businesses increased at a moderate pace. In apositive turn, business confidence showed significant improvement, reaching afour-month high.

TL;DR

	Aspect	Detail
1	PMI Value (Dec 2023)	45.7
2	Comparison to Previous Months	Highest in four months
3	Initial Estimates	44.3
4	Previous Month's PMI Value	45.4
5	Consecutive Months of Contraction	7
6	Main Cause of Contraction	Weak demand conditions
7	New Orders Trend	Declined for the 8th consecutive month, but at a slower rate than November
8	Backlog of Orders	Significantly reduced, fastest in over three years
9	Employment Growth	Remained steady

The forecast forFrench Flash Services PMI suggests a modest increase to 46.4, upfrom the previous reading of 45.7.

The upcoming FrenchFlash Services PMI release is scheduled to be disclosed on January 24that 08:15 AM GMT.

The last time,the French Flash Services PMI was announced on the 15^th ofDecember, 2023. You may find the market reaction chart (EURUSD M5) below:

EUR – German Flash Manufacturing PMI

This keyeconomic indicator offers a leading insight into the health of the economy, asbusinesses are known to swiftly respond to fluctuating market conditions. Theviews of purchasing managers, who are deeply entrenched in the day-to-dayoperations of their companies, provide some of the most immediate and pertinentperspectives on economic trends. The survey, encompassing responses fromapproximately 800 purchasing managers, asks these professionals to evaluatevarious business elements. These elements include employment levels, productionrates, new order volumes, pricing trends, the efficiency of supplierdeliveries, and the status of inventory stocks. This comprehensive assessmenthelps paint a clear picture of the current economic landscape.

The HCOB GermanyManufacturing PMI had been revised slightly higher to 43.3 in December 2023, upfrom a preliminary figure of 43.1, and marking an improvement from November’s42.6. Despite remaining in contraction territory, there were indications thatthe manufacturing sector might have passed the worst of its downturn. Theperiod witnessed solid and somewhat accelerated declines in both output andemployment. However, more forward-looking indicators had been showing signs ofimprovement, with new orders falling at their slowest rate in eight months andbusiness expectations turning positive for the first time since the previousApril. On the pricing front, manufacturers had continued to reduce factory gatecharges amidst competitive pressures and lower input costs. Notably, the rateof decline in output prices had been the slowest in seven months, althoughstill modest. Concurrently, manufacturers had cut workforce numbers at thefastest rate since October 2020, adapting to reduced capacity utilization.

TL;DR

	Aspect	Detail
1	PMI Value (Dec 2023)	43.3
2	Preliminary PMI Value	43.1
3	Previous Month's PMI Value	42.6
4	General Trend	Improvement, but still in contraction
5	Output and Employment	Solid declines, somewhat accelerated
6	New Orders	Slowest rate of decline in eight months
7	Business Expectations	Turned positive, first time since previous April
8	Pricing Trends	Reduction in factory gate charges due to competitive pressures and lower input costs
9	Output Prices	Slowest decline in seven months, still modest
10	Employment Trend	Fastest workforce reduction since October 2020
11	Capacity Utilization	Adapted to reduced capacity, hence workforce cuts

The projected German Flash ManufacturingPMI suggests a rise to 44.6, up from the previous reading of 43.3.

The forthcoming release of the GermanFlash Manufacturing PMI is set to be revealed on January 24^that 08:30 AM GMT.

The last time, the German FlashManufacturing PMI was announced on the 15^th of December, 2023.You may find the market reaction chart (EURJPY M5) below:

EUR – German Flash Services PMI

The PurchasingManagers’ Index (PMI) is widely recognized as a critical barometer of economichealth. This index is pivotal because businesses often respond swiftly tofluctuations in market conditions, and purchasing managers are at the forefrontof gauging these changes. They possess up-to-the-minute insights that reflectthe company’s perspective on the economy. The PMI is compiled from a survey ofapproximately 800 purchasing managers. These professionals are asked toevaluate various aspects of business conditions, such as employment,production, new orders, prices, supplier deliveries, and inventory levels.Their responses offer a comprehensive overview of the economic landscape,making the PMI a valuable tool for understanding the current state of theeconomy.

The HCOB GermanyServices PMI was revised upwards to 49.3 in December 2023, from an initialestimate of 48.4, marking a slight increase from November’s figure of 49.6.This revision indicated that the services sector experienced a modest accelerationin its rate of contraction. Factors contributing to this trend includedtightened financial conditions, general weakness in the broader economy, andclient hesitancy driven by political uncertainty and geopolitical tensions.

The servicessector saw a continued decline in new business inflows for the sixthconsecutive month, particularly in terms of new work received frominternational sources. Concurrently, the level of outstanding business furtherdecreased. In response to these challenges, service providers reduced theirstaff numbers at the fastest rate since June 2020, primarily as a measure tocut costs, which were rising notably due to increased wages. Additionally, ahike in road tolls at the beginning of the month contributed to a sharp and acceleratedrise in overall input costs.

Despite thesechallenges, expectations for business activity over the next 12 months remainedrelatively stable, with little change from previous forecasts.

TL;DR

	Aspect	Detail
1	PMI Value (Dec 2023)	49.3
2	Initial Estimate	48.4
3	Previous Month's PMI Value (Nov)	49.6
4	Trend	Slight acceleration in rate of contraction
5	Contributing Factors	Tightened financial conditions, economic weakness, political uncertainty, geopolitical tensions
6	New Business Inflows	Declined for 6th consecutive month, especially from international sources
7	Outstanding Business	Decreased
8	Employment Changes	Fastest reduction in staff numbers since June 2020
9	Reason for Employment Changes	Cost cutting, notably due to increased wages
10	Additional Cost Factors	Increase in road tolls, leading to sharp rise in overall input costs
11	Business Activity Expectations	Relatively stable for the next 12 months

The forecastsuggests a rise in the German Flash Services PMI to 49.7, up fromthe previous figure of 49.3.

The upcomingrelease of the German Flash Services PMI is scheduled for January 24^that 08:30 AM GMT.

The last time, the German Flash ServicesPMI was announced on the 15^th of December, 2023. You may findthe market reaction graph (EURJPY M5) below:

GBP - Flash Manufacturing PMI

The PurchasingManagers' Index (PMI) stands as a foremost indicator of economic vitality,reflecting how businesses rapidly adjust to market fluctuations. This survey,encompassing around 650 purchasing managers, serves as a lens into a company'seconomic outlook, with these managers offering some of the most timely andpertinent insights available. Participants in the survey are asked to evaluatevarious facets of business conditions, including employment, production, new orders,prices, supplier deliveries, and inventory levels, providing a comprehensivesnapshot of the economic environment.

In December2023, the S&P Global UK Manufacturing PMI had recorded a slight decrease to46.2, falling just below the initial estimate of 46.4 and marking a declinefrom November's seven-month high of 47.2. The manufacturing sector experiencedits tenth consecutive month of production decline, primarily due to downturnsin the consumer and intermediate goods sub-sectors. This reduction in outputwas attributed to a combination of lower new business intakes, reduced overseasdemand, and efforts by manufacturers and their clients to reduce inventorylevels.

The sector alsosaw a continuous decrease in new business inflows for the ninth month in a row.Additionally, there was a significant reduction in backlogs of work, and theindustry faced job cuts for the fifteenth consecutive month. In terms ofpricing, there was a continued decrease in input costs, while average sellingprices experienced a slight increase for the second consecutive month.

Businessconfidence in the manufacturing sector reached a 12-month low, reflectingconcerns over a weakening economy, the closure of client businesses, and theimpact of high interest rates.

TL;DR

	Aspect	Detail
1	PMI Value (Dec 2023)	46.2
2	Initial Estimate	46.4
3	Previous Month's PMI Value (Nov)	47.2
4	Production Trend	10th consecutive month of decline
5	Affected Sub-Sectors	Consumer and intermediate goods
6	Causes of Output Reduction	Lower new business intakes, reduced overseas demand, inventory reduction efforts
7	New Business Inflows	Decreased for 9th consecutive month
8	Backlogs of Work	Significant reduction
9	Employment	Job cuts for 15th consecutive month
10	Pricing Trends	Decrease in input costs, slight increase in average selling prices
11	Business Confidence	Reached a 12-month low
12	Concerns	Weakening economy, closure of client businesses, high interest rates

The BritishFlash Manufacturing PMI is expected to rise to 47 from itsprevious reading of 46.2, according to the forecast.

The BritishFlash Manufacturing PMI is set to be released on January 24th at09:30 AM GMT.

The last time,the British Flash ManufacturingPMI was announced on the 15^thof December, 2023. You may find the market reaction chart (GBPAUD M5) below:

GBP – Flash Services PMI

In thefast-paced world of economics, businesses are often the first to sense shiftsin market conditions. Their responses are crucial indicators of economichealth. At the forefront of this insight are purchasing managers, whoseperspectives offer a direct glimpse into a company's outlook on the economy. Totap into this valuable source of information, a survey of approximately 650purchasing managers is conducted. This survey probes these professionals toassess various aspects of business conditions. Key areas of focus includeemployment trends, production rates, new orders, pricing dynamics, supplierdelivery performance, and inventory levels. Their responses provide a real-timebarometer of the economic landscape, making it a vital tool for understandingmarket trends.

In a noteworthydeviation from Eurozone trends, the UK services sector experienced asignificant boost in December 2023, with the S&P Global/CIPS UK ServicesPMI rising to 53.4, the highest since June and above expectations. This growth,marking a second consecutive month of expansion, is mainly attributed toincreased new orders, particularly in financial and technology sectors,suggesting a revival in consumer demand. This positive development occursdespite ongoing economic challenges such as high living costs, tight budgets,and restrictive monetary policies by the Bank of England. While the sectorfaces rising operating costs and wage pressures, leading to the highest inputcost inflation since August and cautious hiring, there is a growing optimismabout future business conditions, reaching a seven-month high, indicating aresilient and potentially robust outlook for the UK services sector.

TL;DR

	Aspect	Detail
1	PMI Value (Dec 2023)	53.4
2	Comparison to Previous Months	Highest since June, above expectations
3	Trend	Second consecutive month of expansion
4	Main Growth Drivers	Increased new orders, especially in financial and technology sectors
5	Contextual Challenges	High living costs, tight budgets, restrictive monetary policies
6	Operating Costs and Wages	Rising, leading to highest input cost inflation since August
7	Hiring Practices	Cautious
8	Business Optimism	Growing, reaching a seven-month high
9	Sector Outlook	Resilient and potentially robust

The latestforecast for the BritishFlash Services PMI suggests an expansionat 53.0, which is marginally lower than the previous figure of 53.4.

The BritishFlash Services PMI is set to be released on January 24th at 09:30 AMGMT.

The last time,the British Flash Services PMI was announced on the 15^th ofDecember, 2023. You may find the market reaction chart (GBPAUD M5) below:

CAD - Overnight Rate

In the dynamicworld of currency trading, short-term interest rates have emerged as the keyfactor influencing currency valuation. According to industry experts, tradersprioritize these rates above all other economic indicators. The central focusis not just on the current rates but significantly on their future trajectory.Traders meticulously analyze various economic indicators, but their primarygoal is to forecast how these rates will shift in the future. This approachunderscores the critical role that short-term interest rates play in shapingthe valuation of currencies in the global financial market.

In December2023, the Bank of Canada made the decision to maintain its target for theovernight rate at 5% for the third consecutive meeting, aligning with marketexpectations and leaving borrowing costs at their highest in 22 years.Policymakers had observed signs suggesting that their monetary policy waseffectively moderating spending and easing price pressures. Despite this, thereremained a cautious stance regarding the inflation outlook, with the Bankexpressing readiness to increase the policy rate further if necessary. Thecentral focus for the Bank was to achieve a sustained reduction in coreinflation. It continued to closely monitor the balance between demand andsupply in the economy, inflation expectations, wage growth, and corporate pricingbehavior. Additionally, the Bank confirmed its ongoing commitment toquantitative tightening, reflecting its strategic approach to managing theeconomic challenges at the time.

TL;DR

	Aspect	Detail
1	Overnight Rate Decision	Maintained at 5%
2	Consecutive Meetings at This Rate	3
3	Market Expectation	Aligned with decision
4	Borrowing Costs	Highest in 22 years
5	Monetary Policy Impact	Moderating spending, easing price pressures
6	Stance on Inflation	Cautious, readiness to increase rate if necessary
7	Primary Focus	Sustained reduction in core inflation
8	Monitoring Focus	Balance between demand and supply, inflation expectations, wage growth, corporate pricing behavior
9	Quantitative Tightening	Ongoing commitment

The forecast forthe upcoming Bank of Canada Overnight Rate suggests it will remainunchanged at 5.00%, consistent with the previous announcement.

The upcoming Bankof Canada Overnight Rate announcement is scheduled for January 24th at2:45 PM GMT.

The last time,the Canadian Overnight Rate was announced on the 6^th ofDecember, 2023. You may find the market reaction chart (CADCHF M5) below:

USD – Flash Manufacturing PMI

As a primary indicator of economicwell-being, businesses swiftly respond to market fluctuations, and theirpurchasing managers often possess the most up-to-date and pertinentunderstanding of the company's economic perspective. A survey encompassingapproximately 800 purchasing managers is conducted, where these professionalsare queried to evaluate various aspects of business conditions such asemployment, production, new orders, prices, supplier deliveries, and inventorylevels.

In December 2023, the U.S. manufacturingsector experienced a marked downturn, with the S&P Global U.S.Manufacturing PMI being revised to a lower rate of 47.9 from the initial 48.2estimate, indicating a more severe decline compared to November. This was dueto a decrease in output and an accelerated drop in new orders, reflecting weakdemand both domestically and abroad. Manufacturers responded by cutting down oninput purchases and hiring. The industry faced increased inflationarypressures, with costs rising sharply due to higher prices for metals, plastics,and transportation. Although selling prices increased at the fastest rate sinceApril, overall client demand remained low, leading to a reduction in employmentfor the third month in a row. Despite these challenges, there was a slightimprovement in business confidence, reaching a three-month high.

TL;DR

	Aspect	Detail
1	PMI Value (Dec 2023)	47.9
2	Initial Estimate	48.2
3	Comparison to November	More severe decline
4	Output Trend	Decrease
5	New Orders	Accelerated drop
6	Demand Conditions	Weak, both domestically and abroad
7	Manufacturer Responses	Reduced input purchases and hiring
8	Inflationary Pressures	Increased, with higher costs for metals, plastics, and transportation
9	Selling Prices	Increased at fastest rate since April
10	Client Demand	Remained low
11	Employment Trend	Reduction for the third consecutive month
12	Business Confidence	Slight improvement, three-month high

The latestprojection for the USFlash Manufacturing PMI suggests acontraction, with an anticipated figure of 47.2. This represents aslight decrease from the previous figure of 47.9.

The forthcomingrelease of the USFlash Manufacturing PMI is scheduled for January24th at 2:45 PM GMT.

The last time,the US Flash Manufacturing PMI was announced on the 15^th ofDecember, 2023. You may find the market reaction chart (GBPUSD M5) below:

USD – Flash Services PMI

The PurchasingManagers’ Index (PMI) stands out as a significant indicator of economic health,offering early insights into the state of the economy. Businesses reactpromptly to changing market conditions, and purchasing managers are uniquelypositioned to provide current and invaluable perspectives. This survey involvesaround 400 purchasing managers who are surveyed to gauge their evaluations ofdifferent facets of business conditions, including employment, production, neworders, pricing, supplier deliveries, and inventory levels.

In December2023, the S&P Global US Services PMI underwent a slight upward revision,reaching 51.4 from an initial estimate of 51.3. This revision highlighted thecontinued strength of the services sector, representing the most robust growthseen in five months. The improved output was driven by heightened demandconditions, with new orders surging at their fastest rate since June.Businesses were buoyed by the positive sales environment, leading to anincrease in hiring activity. However, service providers also faced rising inputcosts due to higher wages and food prices, contributing to inflation.Nonetheless, efforts to stimulate new sales tempered the increase in outputcharges. Notably, business confidence saw a modest uptick, fueled by expectationsof increased client demand, potential interest rate reductions, and investmentsin advertising and new product development.

TL;DR

	Aspect	Detail
1	PMI Value (Dec 2023)	51.4
2	Initial Estimate	51.3
3	Growth Indicator	Most robust in five months
4	Output Drivers	Heightened demand, fastest new orders rate since June
5	Hiring Activity	Increase due to positive sales environment
6	Input Costs	Rising, influenced by higher wages and food prices
7	Inflation Contribution	Significant, despite efforts to stimulate new sales
8	Output Charge Adjustments	Tempered increase
9	Business Confidence	Modest uptick
10	Confidence Factors	Expectations of increased client demand, potential interest rate reductions, advertising and new product investments

The projectedfigure for the USFlash Services PMI indicates a continuingexpansion, though at a slightly reduced rate, with a forecast of 51.0compared to the previous outcome of 51.4.

The upcomingrelease of the USFlash Services PMI is set for January 24^that 2:45 PM GMT.

The last time,the US Flash Services PMI was announced on the 15^th ofDecember, 2023. You may find the market reaction chart (GBPUSD M5) below:

CAD – BOC Press Conference

This is one ofthe main ways the Bank of Canada interacts with investors about its monetarypolicy. It thoroughly discusses the elements influencing the latest decision oninterest rates, including the general economic forecast and inflation.Crucially, it offers hints about potential future monetary policy directions.

In the MonetaryPolicy Report Press Conference opening statement held on October 25, 2023, theBank of Canada announced that they had maintained the policy interest rate at5% and continued the policy of quantitative tightening. Although inflation haddecreased since the summer of 2022, it was still considered high. The Bank hadkept the policy rate steady to allow monetary policy to work on cooling theeconomy and alleviating price pressures. They expected further easing ofinflation, although it might be slow, and had noted an increase in inflationaryrisks. The statement also highlighted the global economic context, geopoliticaltensions, and the importance of monitoring various economic indicators andpolicy decisions in the future.

TL;DR

	Aspect	Detail
1	Policy Interest Rate Decision	Maintained at 5%
2	Quantitative Tightening	Continued
3	Inflation Status	Decreased since summer 2022 but still high
4	Reason for Steady Policy Rate	To cool the economy and alleviate price pressures
5	Inflation Outlook	Expected further easing, though slow
6	Inflationary Risks	Increased
7	Global Economic Context	Highlighted as important factor
8	Geopolitical Tensions	Noted as a consideration
9	Future Policy Monitoring	Emphasis on monitoring various economic indicators and making future policy decisions

The Bank of Canada(BOC) Press Conference is scheduled to take place on January 24^that 4:00 PM GMT.