US Business Activity Seen Expanding in July PMIs

The upcoming release of US Purchasing Managers' Indices (PMIs) for July is expected to show healthy business activity in the country. The S&P Global Services PMI is anticipated to decline slightly to 51.0 from 51.2 in June, while the S&P Global Manufacturing PMI is forecasted to edge higher to 54.5 from 53.9.

The surveys will provide valuable insights into employment and input inflation, which could influence the US Dollar's (USD) valuation. Analysts at TD Securities predict that both manufacturing and services PMIs will improve in July, with manufacturing rebounding to 54.5 and services continuing to improve to 51.5.

However, analysts at Rabobank caution that the initial July PMI signals may not fully capture the latest geopolitical and commodity-market developments, particularly the recent escalation in the Middle East and the increase in oil prices.