U.S. Business Growth Slows, PMI Hits New Low

U.S. business growth slows as the Composite PMI drops to a new low of 51.2 in April, signaling a slowdown in the economy. Learn more about the latest market trends and economic outlook.

Financial markets digested a mixed bag of signals during Wednesday’s U.S. session, as business activity showed signs of strain while investor sentiment was buoyed by a possible thaw in trade tensions with China.

According to the flash Composite PMI data from S&P Global, U.S. business activity expanded at its slowest pace in over a year, slipping to 51.2 in April from 53.5 previously. The slowdown was driven primarily by a deceleration in the services sector, reflecting weakened business confidence amid persistent global trade policy uncertainty.

Despite the somber PMI figures, sentiment in equity and currency markets found a temporary anchor in Washington. President Donald Trump suggested that the White House may reconsider its steep tariffs on Chinese imports, a gesture interpreted by investors as a step toward easing trade friction. He also notably softened his stance on the Federal Reserve, refraining from his usual criticisms.

The Dollar Index (DXY) responded with strength, rising to an overnight peak of 99.93 before settling slightly lower ahead of Thursday’s Asian session. The greenback’s resilience reflects both safe-haven demand and expectations for solid labor market data later today.

U.S. Business Growth Slows, PMI Hits New Low

Asia Session Outlook: Light Trading Expected Amid Anzac Day

Liquidity is expected to be thinner in the Asia session as both Australian and New Zealand markets are closed for Anzac Day. This could heighten volatility for the Aussie (AUD) and Kiwi (NZD) as traders navigate through low-volume conditions. The AUD recovered from an overnight dip below 0.6400, while the NZD stabilized above 0.5950.

Meanwhile, spot gold prices briefly dipped below $3,300/oz, a move influenced by dollar strength, but steadied around $3,310/oz as the Asia session commenced.

Key Data Ahead: U.S. Unemployment Claims, Durable Goods Orders

Markets now shift their attention to a fresh round of economic data scheduled for 12:30 pm GMT. Unemployment claims, which have trended lower over the past month, are seen as a barometer of labor market health. The previous reading came in at 215,000, and another soft print could further lift the dollar.

Durable goods orders are forecast to rise 0.3% month-on-month in March, following solid gains in January (3.3%) and February (0.9%). However, risks remain skewed to the downside due to the ongoing tariff-related uncertainty clouding corporate investment.

Currency Market Snapshot:

• DXY (Dollar Index): Next 24H Bias: Weak Bearish
  Strong bids overnight but sensitive to labor and manufacturing data due later today.
• AUD & NZD: Next 24H Bias: Weak Bullish
  Closed markets due to Anzac Day could bring choppy price action in low liquidity.
• JPY & CHF: Next 24H Bias: Weak Bearish
  Safe-haven demand wanes as trade tensions show signs of easing.
• EUR: Next 24H Bias: Weak Bullish
  German Ifo Business Climate expected to remain positive, supporting the euro.
• GBP: Next 24H Bias: Weak Bullish
  Stabilization after a weak PMI print, but sentiment remains cautious.
• CAD: Next 24H Bias: Weak Bearish
  Weighed down by trade tensions and weak oil sentiment.

Commodities Watch:

• Gold (XAU): Next 24H Bias: Weak Bullish
  Hovering near support, with potential to bounce if U.S. data underwhelms.
• Oil:
  No major headlines, but volatility remains amid demand-side concerns and geopolitical uncertainty.

As markets brace for the next round of U.S. data, investor focus remains squarely on macro signals and global trade headlines. Any surprises from unemployment or manufacturing could dictate near-term direction for both the greenback and broader risk sentiment.

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