Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Wednesday morning kicks off with the publication of the final services PMIs for Spain (0815GMT), Italy (0845GMT), France (0850GMT), Germany (0855GMT), the EZ (0900GMT) and the UK (0930GMT). The release of the ISM services PMI at 1500GMT is the main data event to follow in the US, although much focus will be on the headlines from the US relating to the Presidential election.
Services PMIs expected to ease in October Amid Surge of Covid-19 cases
Spain's and Italy's services PMI, for which no flash estimate is available, are expected to ease slightly in October, contributing further to the divergence between the manufacturing and service sector. Spain's services PMI is forecast to drop to 40 in October, down from 42.4 recorded in September, while Italy's index is seen at 47.1 after it edged up to 48.8 in the previous month.
France's, Germany's and the EZ's services PMIs are expected to register in line with the flash results showing a downtick in October. All three indices registered below the 50-mark in October according to the flash estimate, signalling contraction in the service sector. France's PMI is expected to fall by 1 point to 46.5 in October, while Germany's index is forecast to drop below the 50-mark to 48.9 and EZ's services PMI is forecast to decline by 1.8 points to 46.2 in October. The UK's final services PMI is expected to register in line with the flash estimate showing a small downtick to 52.3. However, the index is still above the 50-mark which signals expansion.
The stricter social distancing measures weigh more on the service sector, especially on sectors which are more exposed to social contacts such as hospitality sector and accommodation services. Looking ahead, November is likely to see another weak reading for the services PMIs as several European countries went into a second national lockdown.
ISM services PMI forecast to decrease
The ISM services PMI ticked up 0.9 points in September to 57.8, marking the fourth successive reading above the 50-mark. September's uptick was driven by a significant increase of new orders and employment. In October markets expect the index to ease slightly by 0.3 points to 57.5. Similar survey evidence suggests an upside risk. The flash IHS services PMI rose to a 20-month high in October, while the Dallas Fed services index rose to best reading this year.
The main events to look out for alongside the election fallout include speeches by ECB's Luis de Guindos, Fabio Panetta, Isabel Schnabel and Elizabeth McCaul.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.