Bundle of Data from the US does not Help USD

Between the hours of 14:45-15:00 markets got to know three macroeconomic publications from the United States – publication of the PMI service according to Markit, PMI Non-Manufacturing by ISM and Factory Orders. Below the details and the reaction of the US dollar.

Markit PMI: Strong improvement in October

According to the report, IHS Markit (full text under the link) activity of the service sector in October was the highest in almost a year. The strongest appreciation was observed in terms of new jobs and the rate of creation of jobs. The results in historical perspective presented in the chart below:

Source IHS
Source IHS

The value of the index increased from 52.30 reported in September to 54.90 in October. This is the best reading since November 2015. As said Chris Williamson, chief economist at Markit Business IHS, “stronger economic growth, the positive creation of jobs, rising prices and improved consumer confidence pave path to raise interest rates by the Fed at the end of the year.”

Note, however, that in the US far more important are the publications of the local institute ISM – and it was what the market was waiting for with more impatience.

Non-Manufacturing PMI by Institute for Supply Management (ISM) below expectations

Despite the positive results of the services PMI Markit , PMI Non-Manufacturing by ISM is below expectations. Analysts had expected slide lower from the high levels achieved 57.10 in September to 56.00 area – but finally the October rate was ranked at a height of 54.80 (the full report can be found at the link).

Analysing the individual components of the indicator, the slides were observed practically in every sector, except for inventories and prices, where the dynamics is positive. The strongest loss was observed in employment (index fall by 4.1 from 57.2).

Factory Orders higher than forecast

In terms of factory orders , September brought the result of + 0.3%, which was better than forecasts of + 0.2% coinciding with the August result. In case of indicator excluding transport sector, the reading was on level 0.6% (vs. 0.0%). Negative growth deepened, however, orders for plant and equipment (-0.3% compared to -0.1% from the initial report).

The dollar slightly lost

After publication of all results we witnessed on the EUR/USD a slight growth. However, they are also related to fact that pair reached significant in terms of technical analysis- level of 1.1060, which after a long series of declines finally gave EUR/USD support. At this point, the correction stopped on 23.6% intraday decline abolition of Thursday’s session:

EUR/USD M5
EUR/USD M5
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