What PMI in Forex Industry?

[ereanoraella 10]

Hi, I have doubt regarding PMI. I couldn't get clear explanation till now. Can any one explain me.

[MilaRose 10]

Purchasing Managers Index (PMI)

 

The PMI is a composite index of five "sub-indicators"

 

Production level

New orders (from customers)

Supplier deliveries - (are they coming faster or slower?)

Inventories

Employment level

[revival_fx 10]

There are other sources of PMI, but here is what Forex Factory has to say about HSBC's PMI Measurement.

 

Measures

Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry;

 

Usual Effect

Actual > Forecast = Good for currency;

 

Frequency

Released monthly, around 3 weeks into the current month;

 

FF Notes

Above 50.0 indicates industry expansion, below indicates contraction. There are 2 versions of this report released about a week apart – Flash and Final. The Flash release, which the source first reported in Feb 2011, is the earliest and thus tends to have the most impact;

 

Why Traders Care

It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy;

 

Derived Via

Survey of about 430 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories;

[epicadvice 10]

An economic indicator that measures manufacturing conditions and performance month over month by tracking the percentage of purchasing mangers that report better or worse business conditions from the previous month.

[CapitalBosters 10]

Purchasing Managing Index (PMI)

An economic indicator that measures manufacturing conditions and performance month over month by tracking the percentage of purchasing mangers that report better or worse business conditions from the previous month.

[muneeb5 10]

manufacturing conditions and performance month over month by tracking the percentage of purchasing mangers that report better or worse business conditions from the previous month.

 

 

 

 

 

 

 

 

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45gill

[tradelab 10]

An indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

 

A PMI of more than 50 represents expansion of the manufacturing sector, compared to the previous month. A reading under 50 represents a contraction, while a reading at 50 indicates no change. Prior to September 1, 2001, the acronym (PMI) stood for Purchasing Managers' Index. The Institute of Supply Management (ISM) now uses only the acronym, PMI. Although the ISM publishes several indexes, the PMI is the most widely followed and is sometimes referred to as the ISM index.

[tradelab03 10]

The PMI is released at 10 AM on the first business day of a month by the Institute for Supply Management (ISM). This index indicates growth if the report is above 50 while it indicates contraction when the report is less than 50. Its components are: new orders, inventory levels, production levels, supplier deliveries, and the employment environment.

[nhn 10]

An economic indicator that measures manufacturing conditions and performance month over month by tracking the percentage of purchasing managers that report better or worse business conditions from the previous month.

[fxpartyguy 10]

Is it applied exclusively to US state of manufacturing or for any country? What about market impact on the time of its release?