This first week of September will have a few releases that may have significant impact on the market volatility. A couple of important indicators, that are released monthly, will be Chinese and UK Manufacturing PMI. The release of Manufacturing Purchasing Manager's Index (PMI) affects the markets because it is an indicator of economic health.
The purchasing manager's of the companies that provide the insight can reveal a down on the "street" beat of what is happening in their industry. Are purchase orders, inventory, supply and demand up, or are they down from the previous month?
The release of these numbers and how they are viewed can cause a "tremor" in the currency markets as well as for other markets (stocks, bonds and commodities). A measurement above 50 means that the economy is expanding; which, of course, may be good for that nation's economy, but certain trends can reveal more impact both negative and positive.
Last month's release revealed expansion in both the Chinese and UK economies, with measurements of 51.7 and 55.4, respectively.
With the two major economies, U.S. and China, continuing to show signs of expansion, this could point toward's a stronger dollar on the curreny market forefront. One thing to keep an eye on is the PMI measurement for the U.K.'s economy. Although the index has been showing overall expansion for the last year or so. Could a significant contraction be lurking around the corner that may potentially weaken the pound on the trading markets?
We'll see if the GBP/USD trends bearish on the release of the U.K.'s Manufacturing PMI measurement.
It will be interesting to see how good trader's will profit as we approach what looks to be an active last quarter of 2014.
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How can these indices affect your trading for the week? Simple…you want to be on the winning side of this volatility.
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