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In a quiet calendar week, the US PMI prints are likely to receive more focus than normal ahead of the Jackson Hole symposium. Traders will be looking for these PMI prints to see if the recent rise in yields is justified, or whether or not signs of slowing growth on the horizon may temper some of the Fed’s enthusiasm for higher rates.

The last S&P Global US Services PMI print came in at 52.3 for the month of July. This was the slowest growth in the services sector since March of this year. It was also the second drop from the May’s high print of this year, indicating that demand is cooling in the service sector.

Will demand show further cooling? Traders will be watching for a print that comes in below market expectations. At the time of writing, the minimum expectations are not out, but any print that comes in below 50 would show contraction and likely see traders start to expect a slightly less aggressive rate path from the Fed. That would push yields lower, weaken the dollar, and support gold to move higher.

It will be necessary for the US S&P Global Manufacturing PMI prints to come in weak too, as that would further support the need for less aggressive moves by the Fed. The manufacturing PMI prints have been weaker than the services sector (which enjoyed a post-pandemic boost), but any reading under 48 would be the weakest seen since March of this year and would likely send the US dollar lower, yields lower, and gold higher.

Gold in Focus

One way that traders may look to take advantage of any big misses in the data could be by using the daily pivot points for targets and stop levels.

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