THE TAKEAWAY: USD ISM Non-manufacturing (JUL) > 56.0 versus 53.1 expected, from 52.2 > USDJPY BULLISH
The US ISM Non-manufacturing comes in at 56.0 for July, matching this year’s high recorded in February. The 56.0 print today is much stronger than the Bloomberg News survey consensus of 53.1 and sharply higher than June’s 52.2 print. ISM Chairman Anthony Nieves noted that 16 non-manufacturing industries reported growth during July; the only two industries that contracted were mining and health care and social assistance.
While the headline print is good, investors also consider the index subcomponents. The ISM Non-factory Employment Index drops to 53.2, down from 54.7 in June. This reflects the recent worries about the labor market, after a meaningful miss in NFPs on Friday: +162K jobs added in July; +185K Bloomberg News survey expected.
ISM Non-factory Prices Index shot up to 60.1 in July, much higher than the 52.5 June reading. ISM Non-factory Orders also increased to 57.7, stronger than the 50.8 print in June. These two index subcomponents pushed the headline print higher, highlighting robust demand.
USDJPY 1-minute Chart: August 5, 2013
Charts Created using Marketscope – prepared by Kevin Jin
The USDJPY is about +10 pips net higher after the strong ISM data. The initial run failed to reach ¥99.80 and hovers around 98.70 at the time of writing.
--- Written by Kevin Jin, DailyFX Research
