Talking Points:
- October US ISM Services prints at 54.8, lower than the expected 56.0.
- ISM Services has had a very volatile past 4 months.
- EUR/USD fellas the US Dollarstrengthened on the news, and then reversed.
The US ISM Non-Manufacturing/Services survey for October disappointed expectations, coming in at 54.8 versus expectations of 56.0. It was also significantly lower than the previous reading of 57.1. There hasn’t been any substantial linear trend with ISM, with its last few data points fluctutating wildly from 52.9 to 56.5 to 51.4 and last month’s 57.1.
Combining this weakness with with the October US ISM Manufacturing survey, which beat expectations last week with a print of 51.9 versus expectations of 51.7, paints a hazy picture. The gain in the ISM Manufacturing Index was largely driven by an uptick in the employment component. Conversely, the drop in ISM Non-Manufacturing was largely driven by a dip in the employment component.
ISM Services leaves us after a week packed with global economic data, looking forward to US Non-Farm Payrolls tomorrow.
See the DailyFX economic calendar for Thursday, November 3, 2016
Chart 1: EUR/USD 1-minute Chart: November 3, 2016 (Intraday)
As the report came out, the US Dollar rose against the Euro, with EUR/USD falling immediately from 1.1077 to as low as 1.106. The pair then reversed and pushed higher, and by the time this report was written, was trending near 1.1079.
--- Written by Omar Habib
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