- ISM non-manufacturing PMI rises to 55.3 from 53.9 prior
- However, the increase is smaller than the 55.8 consensus forecast
- USD dropping on the day once more
Whilst the surprise Canadian rate hike has caused the largest moves this afternoon, there’s also been some important US data. The ISM non-manufacturing PMI print for August at 55.3 showed an improvement on the prior reading (53.9) but came in below expectations (55.8).
A look at both this ISM reading and the PMI services reveals that both have picked up lately and are currently towards the upper end of the range seen since the start of 2015. The start of last year saw some bad readings for both, with the PMI services in particular a cause for concern as it briefly dipped below 50 and into contractionary territory. Since then there has been a marked improvement with the latest data points continuing this upwards trend.
The latest ISM non-manufacturing and PMI services readings have improved. This has added to the rise seen since the start of last year. Source: XTB Macrobond
Last week’s disappointing NFP print had threatened to raise some early questions as to whether the labour market strength seen in recent years was close to peaking. However the employment component of today’s survey supports the reading in last week’s ISM manufacturing print in going some way to alleviating any early doubts. The services reading from payrolls showed a marked drop off (red line below) but today’s ISM number contrasts this in showing a strong increase.
The employment component of the ISM release contrasts the services reading in payrolls in showing a marked improvement. Source: XTB Macrobond
The rise in the data however has failed to support the US dollar which remains under pressure. The heatmap on xStation reveals that the USD is declinign against nearly all of its peers with only the NZD, PLN and JPY weaker at the time of writing.
The US dollar is enduring another challenging day trading lower against the vast majority of its peers.
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