BREAKING: US PMI above expectations! 📈🔥EURUSD declines!

15:45 - S&P Global USA PMI (October): 

• Composite: 54.8 (Previous: 53.9)
• Manufacturing: 52.2 (Expected: 51.9 Previous: 52)
• Services: 55.2 (Expected: 53.5 Previous: 54.2)

PMI came out surprisingly strong in October. Combined with lower-than-expected inflation, this is a very strong signal that the US economy is doing better than most anticipated. 

We can see recovery in economic activity based on PMI across the broad economy, but Services are growing much more than manufacturing. 

What is important to notice, is that indicators not only exceeded expectations, but those expectations forecasted a slight decline from previous month levels.

Not only said decline was not observed, but PMI actually grew compared to last month. It is likely that wealth-effect from ballooning asset prices combined with recently lowered borrowing costs have supercharged consumers and business spending. 

This reading signals strong economy, however it's not always good for the markets. If the PMI were to be slightly lower, it would give FED further reason to losses monetary policy, which would further increase asset value. 

The strong economy lessens the need for policy relaxation, which sends the stock market lower and boosts the dollar. 

EURUSD has already erased most of its gains after CPI reading. 

Source: xStation5