July 2 Macroeconomic data interpretation: S&P Global Services PMI/ISM Non-Manufacturing Data/May Factory Orders
21:45 Final value of US June S&P Global Services PMI: Previous value 55.1, expected value 55.1, announced value 55.3
Data weight: ★★
The data released was higher than expected and the previous value, and higher than the year-on-year reading of 54.8 in May. According to S&P statistics, the U.S. service industry was on a growth trend in June, which means that the economy is active and consumption power is increasing, which is not conducive to inflation control. It is good for the U.S. economy, the U.S. dollar, and U.S. stocks, but bad for risk markets.
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22:00 US June ISM non-manufacturing PMI, previous value 53.8, expected 52.5, announced 48.8
Data weight: ★★★
The data is released by the Supplier Management Association of the United States. As an index of non-manufacturing service industries, it has a higher weight than the S&P PMI index.
Data showed that the non-manufacturing PMI data in June was significantly lower than expected and the previous value. Non-manufacturing activities in June declined significantly, and the inflationary pressure brought by the service industry eased. This data is bearish for the US economy, the US dollar, and US stocks, but is good for the risk market's expectations of interest rate cuts.
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22:00 US May factory orders monthly rate, previous value 0.4% (0.7% before correction) expected 0.2% announced value -0.5%
Data weight:★
The data was provided by the U.S. Department of Commerce. It showed that the growth of U.S. factory orders in May was lower than expected and the previous value, and even showed negative growth. The data is forward-looking data. The May data shows upcoming deliveries or future orders. The weakening of May's order data will have more impact on factory production and recruitment in June and July.
Of course, although manufacturing is vital to the U.S. economy, it is still not the most important part of the U.S. economy. The weakening of manufacturing orders proves that manufacturing activity has declined and economic expectations have weakened, which is bad for the U.S. economy, the U.S. dollar, U.S. stocks, and even the job market, but good for the risk market's expectations of interest rate cuts.
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22:30 U.S. EIA crude oil inventory (10,000 barrels) for the week ending June 28, previous value 359.1, expected -68, published value -1215.7
Unit (10,000 barrels)
The data is supported by the U.S. Energy Information Administration, which shows the situation of domestic energy inventories in the United States as of the week ending June 28. The data expected a small decrease in inventories, but the actual announced value decreased by 12.157 million barrels. This large-scale inventory reduction will inevitably bring greater fluctuations in domestic energy prices in the United States. At the same time, it will cause tension in the supply and demand relationship in the energy market in the short term. The rise in energy prices will also pose a certain threat to the inflation data in June.
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Judging from today's data, the job market and services are gradually cooling down, which will bring certain benefits to the job market and inflation, but the short-term rise in energy prices will also pose a threat to inflation. The overall economic data is basically below expectations, especially the service industry, which accounts for the largest proportion of US GDP, shrinking at the fastest rate in four years. Although this has pushed up the possibility of the Federal Reserve cutting interest rates twice this year and in September, the US dollar index has fallen all the way because the data is below expectations, and rebounded after hitting 105.
The 10-year U.S. Treasury yield fell, U.S. stocks rose, Nvidia led the gains again, and technology stocks rose and fell. Under the premise of increasing expectations of interest rate cuts, the rise of U.S. stocks is not all the way up. The rise of Nvidia and the decline of other technology stocks seem to show how scarce the liquidity of the current market is.
The Fed’s June monetary minutes will be released at 2 a.m. tonight. At present, it has little impact because it is 99% likely to maintain the current interest rate. However, some scholars believe that the minutes of this meeting can provide more information about the Fed or Powell’s views on monetary policy. Let’s wait for the follow-up.
PS: The current non-farm data expectation for Friday is 190,000, which is a significant decrease compared to the previous value.
