Strong ISM manufacturing bolsters Fed hike case - ING

Eren Sengezer FXStreet

Analysts at ING explain: "It’s been a positive start to what is set to be a bumper data week in the US. The ISM manufacturing survey soared back up to 57.8, comfortably above consensus and driven by an encouraging pick-up in new orders and production. The manufacturing sector is clearly a source of strength in the US right now, and the latest survey readings are a far cry from the sub-50 lows seen at the beginning of 2016."

"But in its quest for evidence that the dip in economic activity in the first quarter was “transitory”, the Fed will be more interested in Friday’s US jobs report. We’re looking for a robust pick-up in wage growth on Friday, which could see market pricing edge slightly more inline with the Fed’s hawkish hike ambitions – although the broader lack of core inflationary pressures recently means investors are likely to remain fairly sceptical about the Fed’s plan to hike four more times by the end of 2018."

"But in the near-term, given the tight labour market and a decent pick-up in domestic demand (which could see 2Q GDP return to the 3% region), we think a September hike still looks likely."

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.