The ISM Non-Manufacturing PMI jumped to 56 points in July. It was expected to rise from 52.2 to 53.2 points, showing another month of moderate growth in the services sector. This is already more than moderate but rather solid growth. However, the employment component is lower: at 53.2 from 54.7 points in June.
The US dollar was strengthening before the publication, with EUR/USD sliding to 1.3250, GBP/USD falling from the highs and USD/JPY slightly off the lows. The dollar is higher, with EUR/USD slipping below 1.3240, GBP/USD at 1.5330 and USD/JPY up to 98.70.
Other notable components: new orders jumped from the barely growing at 50.8 to 57.7 points. Price jumped from 52.5 to 60.1 points.
The services sector is by far the largest in the US. When this report is published before the Non-Farm Payrolls, it serves as an indicator towards the event, with the employment component getting the biggest attention.
The ISM Manufacturing PMI exceeded expectations, and the employment component was the highest in a year.
The weaker than expected Non-Farm Payrolls gain of 162K jobs in July left the QE tapering question wide open.