FXStreet (Edinburgh) – Analyst at ING Bank James Knightley assessed today’s opposite results from the US calendar in light of the upcoming Non-farm Payrolls and the potential Fed’s lift-off.
Key Quotes
“After a disappointing ADP employment number showing private sector jobs growth of “just” 185k we get an ISM non-manufacturing employment index jumping to a 10 year high!”.
“In terms of what this all means for Friday’s official BLS employment report we haven’t got a clue. Combining today’s figures with jobless claims near 40 year lows and the ISM manufacturing employment number still hovering above its 6 month average we are going to stick with our forecast of 220k for non-farm payrolls growth on Friday. We also are going for a September Fed rate hike”.
“In terms of other aspects of the ISM non-manufacturing report it all looks really strong. The headline index has jumped to 60.3 from 56.0 and is well above the 56.2 consensus figure”.
“Again, you have to go back to 2005 for the last time we have seen such a firm outcome, while business activity is at its highest level since December 2004. New orders are at decade highs”.
“This is phenomenally strong and suggests that the Fed should be hiking rates more than once this year, but given the strength in this report isn’t being seen in other data releases we think there is need for caution”.
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