Trading PMI Data: Reading Purchasing Managers' Index Releases
Trading PMI Data: Reading Purchasing Managers' Index Releases
What Is the PMI?
The Purchasing Managers' Index is a monthly survey of company purchasing managers. Because it is released early in the month, it is a leading indicator of growth before GDP data arrives.
The Key Level: 50
- Above 50: the sector is expanding
- Below 50: the sector is contracting
The direction of change also matters. A move from 47 to 49 is still contraction, but improving.
What the Survey Measures
PMI combines new orders, production, employment, supplier delivery times, and inventories. New orders often hint at future activity and deserve close attention.
Manufacturing vs Services
Manufacturing PMI is sensitive to global trade, while Services PMI often matters more for service-driven economies such as the UK and US. Composite PMI blends both.
Trading the Release
- 1Compare actual vs forecast; the surprise moves price.
- 2Expect spreads to widen at release.
- 3Wait a few minutes for the first spike to settle.
- 4Trade in the direction of the surprise only if it fits the broader trend.
Check the Fino Groups Economic Calendar for upcoming release times.
Educational content only. Trading forex involves significant risk and is not suitable for every investor.