Markets focus on the US data – Societe Generale
|The two most-watched US economic surprise indices, published by Bloomberg and Citi, are showing a steady downward trend – i.e., a lot of negative surprises in the data, Societe Generale FX strategist Kit Juckes notes.
Services ISM and Friday’s NFP data attract plenty of interest
“The negative surprises in data clearly affect sentiment, though we are wary of over-interpreting short-term swings and roundabouts with the data and since employment growth remains consistent with a tight labour market, the Federal Reserve (Fed) will want to see a lot more evidence before embarking on an easing cycle.”
“The downtrend in the data increases the focus on the most closely watched releases; ISMs, labour market data and the CPI/PCE inflation readings. Wednesday services ISM and Friday’s NFP data will attract plenty of interest and any surprise will trigger a reaction.”
“We expect the services ISM to fall back from 53.8 to 52.3, which is consistent with steady growth, and payroll employment to increase by 220,000. I’ll guess the market needs to see something closer to 150k in payrolls and an ISM closer to 50, to get really excited and start selling the dollar.”
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