US business activity data will take center stage on Friday as investors assess the health of the world’s largest economy ahead of the Federal Reserve’s upcoming monetary policy decision.
S&P Global will publish its preliminary October US Purchasing Managers Indices (PMIs) data on Friday, October 23, five days before the Federal Reserve’s October 28 policy meeting. The readings could move rate expectations, which tend to shape risk appetite across crypto markets.
Forecasts Point to a Slight Cooling From September Highs
The S&P Global report covers the Manufacturing, Services and Composite PMIs, which track private-sector business activity.
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S&P Global’s preliminary PMI report for October is expected to show a modest slowdown in private-sector activity following strong readings in September. Markets expect a moderate slowdown from September. The Manufacturing PMI is forecast at 55.6, down from 55.9. The Services PMI is expected to ease to 57.9 from 58.8. The Composite PMI stood at 58.4 in September.
Yet, all forecasts remain well above the 50 threshold. Recent US releases have shown stronger-than-expected inflation, while Retail Sales and labor market indicators point to resilient demand.
The Fed is widely expected to leave interest rates unchanged on October 28, following a 25-basis-point hike in September. According to the CME FedWatch tool, investors are fully pricing in another increase in December.
UK Data Adds to the Global Rate Picture
Separate data published Friday showed the UK’s preliminary S&P Global Composite PMI rising to 53.1 in October from 52.0 in September. That was higher than any forecast in an economist poll and marked the strongest month for UK business activity since February.
S&P Global’s chief business economist, Chris Williamson, said persistent price pressures make a Bank of England rate hike a near certainty. The BoE is expected to raise rates on November 5 for the first time in more than three years.
Why This Matters
Stronger activity data and sticky inflation can reinforce expectations of higher interest rates, which have historically affected liquidity and risk appetite in crypto markets. Traders will watch Friday’s release for signals ahead of the Fed’s October 28 decision.
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