When it comes to the US, yesterday’s April ISM non-manufacturing PMI indicated a further recovery in activity from the early-year lows, key to underpinning expectations for real GDP growth to return to a healthier 2% pace in the second quarter. More importantly, the employment component returned to a healthier level, supporting moderate gains in services payrolls. ADP employment came in the weak side but in past years has underperformed NFP gains in April.
On balance, the data supports another solid NFP print near 200K.
US data takes a pause ahead of payroll Friday.
We remain of the view that labor market conditions continue to improve, thereby reinforcing US growth expectations this year. With another constructive jobs report in sight, USD is on track to regain ground.
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