American business attitudes have remained resolute in the fourth quarter with firms investing for the recovery even as Retail Sales turned negative in the holiday season. The Purchasing Managers’ Index (PMI) is expected to slip to 59.5 in January from 60.7 in December, setting the stage for Friday’s Nonfarm Payrolls. According to FXStreet’s Analyst Joseph Trevisani, the US dollar will be supported by a good report.
Key quotes
“The Purchasing Managers’ Index (PMI) from the Institute for Supply Management (ISM) is forecast to drop to 59.5 in January from 60.7 in December. The New Orders Index was 67.9 and the Employment Index was 51.5 in December.”
“The business community is preparing for the recovery with investment spending and inventory building, convinced that the retreat of the pandemic will not only enable a return to normal but encourage a burst of relief spending.”
“The optimism has not yet carried over into hiring. Employers are waiting for proof that the projected surge in consumption takes place before committing to new workers. The ISM employment Index has been the laggard of the Manufacturing Indexes only reaching 52.1 in October.”
“Dollar will be supported by strong ISM numbers but the main game this week is the payrolls report on Friday.”
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