The purchasing managers’ index for the non-manufacturing (services) sector stands on 56 in February, according to ISM. Early expectations stood on a minor slide from 55.2 to 55, well within growth territory. Also the employment component remained very strong: it slid from 57.5 to 57.2, not a significant change.
The important new orders sub component jumped from 54.4 to 58.2 points and provides hope for the future. A figure above 50 represents growth, while a number under 50 represents contraction. The services sector is by far the largest in the US, and this indicator, especially its employment component, provides an important hint towards the Non-Farm Payrolls. EUR/USD is ticking lower after the publication.
All in all, this is a great report.
Last week, the manufacturing PMI headline was good, but the employment component wasn’t too exciting: while remaining in growth territory, it was lower than in January.
EUR/USD traded higher, around 1.3050, escaping the 1.30 it battled with earlier in the week. GBP/USD also rose, enjoying a better than expected services PMI.
Further reading: A moment of “risk on”Get the 5 most predictable currency pairs