- May 22, 2025
- Posted by: Melanie Scott
- Category: Market News
This week’s U.S. data paints a picture of resilience in the face of uncertainty. Jobless claims dipped slightly to 227K, coming in just below expectations and continuing to show a solid labor market.
Manufacturing and services activity both surprised to the upside. The flash PMIs for May jumped to 52.3 in both sectors (well above forecasts) suggesting business activity is picking back up after a slower April. On the housing front, things cooled a bit. Existing home sales came in at 4.00M for April, below the 4.15M forecast and down from March’s 4.02M. It’s a sign that higher borrowing costs may be weighing on buyers.
In Canada, the spotlight is on Bank of Canada Governor Tiff Macklem, who’s speaking this afternoon at the G7 Finance Ministers and Central Bank Governors’ meeting in Banff (2:30 PM EST). Markets will be listening closely for any hints about the BoC’s rate path, especially amid rising global uncertainty.
The euro area delivered a mixed batch of PMIs this morning. France saw some improvement in manufacturing (49.5 vs. 48.9 expected), but services slipped below forecast to 47.4. In Germany, manufacturing held steady at 48.8, but the services sector came in soft at 47.2. The UK continues to face pressure in its manufacturing sector, with the PMI falling to 45.1—its steepest contraction in two months. Services were slightly more upbeat, rising to 50.2 and staying just above the expansion line. Altogether, the UK Composite PMI moved up to 49.4 from 48.5 last month, but it’s still in contraction territory. That’s keeping concerns alive about a possible GDP decline in Q2.
The USD caught a short-lived tailwind from the upbeat PMI numbers, as signs of economic strength support the case for higher-for-longer rates. Meanwhile, the euro and pound have come under pressure due to ongoing softness in the services sectors and broader macro concerns. Current market conditions:
Navigating currency risks is crucial to long-term success—contact Bendix to discover a proactive, tailored approach to your FX needs.