At 21:45 Beijing time on Thursday, the United States released the preliminary data of the S&P Global PMI for May. The data showed that US business activity accelerated at the fastest pace in two years, mainly reflecting the strong growth of service providers and the rebound in inflation.

The preliminary value of the S&P Global Manufacturing PMI in the United States in May was 50.9, higher than the expected and previous value of 50, the highest in two months; the preliminary value of the S&P Global Services PMI in the United States in May was 54.8, higher than the expected and previous value of 51.3, the highest in 12 months; the preliminary value of the S&P Global Composite PMI in the United States in May was 54.4, the highest in 25 months.

The S&P Global Manufacturing PMI for May rose to 50.9 from 50.0 in April, indicating a modest improvement in business conditions in the goods-producing sector overall. Although lower than the February and March readings, the latest PMI was the third highest in the past 20 months. Compared to April, both output and employment contributed more positively to the PMI, while new orders and purchase inventories weighed less on the PMI. The average supplier delivery time accelerated slightly this month, suggesting that suppliers were less busy and therefore had less of an impact on the PMI.

After the data was released, the US dollar index continued to rise, with a short-term increase of nearly 30 points, and spot gold fell below the 2350 mark in the short term. Traders postponed the Fed's first rate cut estimate from November to December.

The most active gold futures contract on COMEX traded 2,855 lots in one minute from 21:50 to 21:51 Beijing time on May 23, with a total contract value of US$672 million.

The most active silver futures contract on COMEX traded 617 lots in one minute from 21:53 to 21:54 Beijing time on May 23, with a total contract value of US$0.95 billion.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said that after two months of slowing growth, the US economic recovery has accelerated again, with preliminary PMI data showing the fastest expansion in more than two years in May. These data suggest that the US economy will achieve strong GDP growth again in the second quarter. Not only has output risen as orders have resumed growth, but business confidence has also improved, indicating a brighter outlook for the year ahead. However, due to uncertainty about future inflation and interest rate trends, companies remain cautious about the economic outlook and continue to express concerns about geopolitical instability and the presidential election.

Williamson added that the May PMI data showed a pick-up in sales price inflation, continuing to show inflation slightly above target. Interestingly, the main inflation driver now comes from manufacturing rather than services, meaning that both cost and sales price inflation are now higher than the norm for the pandemic, suggesting that the Fed's 2% target still seems elusive.

Article forwarded from: Jinshi Data