The headline release from the US yesterday, was the ISM non-manufacturing PMI reading for December. Last time around, the reading was exceptionally strong at 60.7 and was expected to dip to 59.0. However, it actually came in at 57.6 which is the weakest pace of expansion in the services sector for five months. Respondents alluded to ongoing concerns about trade tariffs, despite the hold on increases from China and the US.
Given that any reading above 50.0 indicates growth, the figures won’t be all that concerning to the markets, especially given how positive the non-farm payrolls were last Friday. After the Dow Jones industrial average surged by more than 700 points on Friday, the movements were far more muted yesterday, which will no doubt be welcomed given the recent volatility.
Today’s highlight is the US balance of trade figures for November, where the deficit is expected to have narrowed slightly. We will also see factory orders for November and the business optimism index for December.
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business trader on 020 7898 0500 or your Private Client trader on 020 7898 0541.