Excellent news from the biggest sector in the US: the ISM Non-Manufacturing PMI rose to 58.7 points, the strongest in a long time. The US ISM Non-Manufacturing purchasing managers’ index for the services sector was expected to advance from 56 to 56.6 points, reflecting continued growth in the largest sector of the economy. The employment component is up from 54.4 to 56 points, and so are other key figures. Factory orders were predicted to show a gain of 0.6%. The actual figure is a strong 1.1% rise. This adds fuel to the fire.
Towards the publication, the US dollar was stronger, standing out especially against the euro: EUR/USD was trading at 1.3375 before the event, close to the bottom. GBP/USD is marginally down from 1.6860 to 1.6850. USD/JPY is above 102.80 following the release, making another attempt at 103.
The forward looking new orders component is up above to 64.9 points, a very strong read. Prices are actually down to 60.9, but this still reflects strong growth.
At the same time, the IBD/TIPP Economic Optimism was estimated to move forward from 45.6 to 46.2 points. This figrue disappointed with a slide to 44.5 points. Nevertheless, the strong headline PMI is certainly good news.
This survey usually serves as an important hint towards the Non-Farm Payrolls. This time, the NFP is already out, with a slight disappointment of 209K jobs gained. Nevertheless, this indicator is of importance.
So while the NFP was not that strong, the other PMI for the services sector, from Markit, was actually higher: 60.8 according to the final read (revised down from 61 points).
For reference, here is the preview: trading the ISM Non-Manufacturing PMI with EUR/USD.
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