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US: Data has not really encouraged recession talks – Westpac

According to Sean Callow, analyst at Westpac, the mood over US-China trade has obviously improved quite a bit but US data has not really encouraged recession talk lately.

Key Quotes

“After the dismal sub-50 print on the Aug manufacturing ISM, the key Aug services sector reading was a great relief, the ISM bouncing to 56.4 (vs 53.8 in China, 53.5 in the Eurozone).”

“The Aug employment report should not have upset the Fed either, with NFP growth of 1.4%yr, a 3.7% unemployment rate and 3.2%yr earnings growth surely consistent with the consensus FOMC forecast.”

“Resilient growth but sub-target inflation and ongoing international political risks argue for a 25bp cut with no explicit commitment to further easing. This should leave DXY higher on the week, probing above 99.”

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