- Chicago Business Barometer adds 6.1 points to record at 49.0 in February.
- 4 out of the 5 primary sub-indices recorded gains in February.
- EUR/USD set to close the week above 1.10 level on Friday.
The Institute for Supply Management (ISM) Chicago announced the Chicago Purchasing Managers’ Index (PMI) report on Friday. Commonly known as the Chicago Business Barometer, the index added 6.1 points to record at 49.0 in February. The reading was reported its best since August 2019.
The four primary sub-indices were reported to have gained traction this month while only one sub-index of employment was announced to have declined. With a gain of 8.3 points, production was registered at 51.0 in February (8-month high). A reading above 50.0 is construed as expansion while below 50.0 represents contraction in the particular sector.
New Orders Post At A Six Month High In February
At 49.1, new orders saw a greater demand in February that added 7.6 points to the sub-index (6-month high). On the order backlogs’ front, Friday’s data posted 38.2 in February that marked a slight gain this month. In January, order backlogs were noted at a record low in the past four years. The figure, however, still remains in contraction since last September.
Inventories were also reported to have remained in contraction for the 7th month in a row in February. The sub-index, however, gained 7.8 points in February to record at 48.1 that marked a 6-month high. Adding 7.9 points this month, supplier deliveries were printed at 61.3 that translated to a record high since November 2018.
The employment sector, however, failed to echo the same optimism with a 2.4 point decline in February to post at 44.5, as per the ISM-Chicago. Employment’s reading was last seen this low in July 2019. February also marked the 2nd month in a row for the factory gate prices to remain weighed. The sub-index dropped 3.2 points this month and was highlighted at 52.9 on Friday.
Analysts Had Forecast The Chicago PMI At 46.1 In February
The Chicago Business Barometer was previously recorded at 42.9 in January. Analysts had forecast it to improve to 46.1 in February. Beating the experts’ forecast, the economic data had a moderate impact on the forex market. All in all, one of the most widely traded currency pairs, EUR/USD, dropped from a daily high of 1.1051 to a low of 1.0951 that marked 100 pips of loss in a few hours.
Much of the loss, however, was recovered later on Friday. At the time of writing, EUR/USD is exchanging hands at 1.1025 level in the forex market. The currency pair is currently recovering fast following an almost 3-year low of 1.0775 last week.