Analysts from Wells Fargo, explain that the ISM rose back into expansion territory (above 50) but warned about the signals from inventories. They point out to the ISM non-manufacturing index, that will be released on Thursday and could give important clues about Friday’s employment report.
Key Quotes:
“A September bounce-back puts the ISM manufacturing index firmly back into expansion territory at 51.5. New orders and production both made the same crossing, but there is a warning signal flashing for inventories.”
“One robin doesn’t make it spring and one sub-50 reading from the ISM doesn’t make it a recession for manufacturing. When the August print for both the ISM manufacturing and non-manufacturing came in below the breakeven 50 we said at the time that the weakness “looks somewhat exaggerated.” We pointed to the generally upbeat comments which did not jibe with the ugly headline reading.”
“Manufacturing payrolls increased a total of 14,000 jobs in June and July before August layoffs in the sector gave all those jobs back. Just days before the jobs report on Friday, we learned today that the employment component of the ISM manufacturing index remained in contraction territory in September, but just barely so at 49.7. The employment component of the ISM non-manufacturing index on Thursday will also be a key piece of final data prior to Friday’s jobs report for September. This will be the last employment report the Fed will have to review at its
meeting on November 1 and 2. Given the proximity to the election, we think that meeting is not in play, although December certainly is.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD eases to near 1.0700 ahead of German inflation data
EUR/USD is paring gains to near 1.0700 in the European session on Monday. The pair stays supported by a softer US Dollar, courtesy of the USD/JPY sell-off and a risk-friendly market environment. Germany's inflation data is next in focus.
USD/JPY recovers after testing 154.50 on likely Japanese intervention
USD/JPY is recovering ground after sliding to 154.50 on what seemed like a Japanese FX intervention. The Yen tumbled in early trades amid news that Japan's PM lost 3 key seats in the by-election. Focus shifts to the US employment data and the Fed decision later this week.
Gold price holds steady above $2,335, bulls seem reluctant amid reduced Fed rate cut bets
Gold price (XAU/USD) attracts some buyers near the $2,320 area and turns positive for the third successive day on Monday, albeit the intraday uptick lacks bullish conviction.
Ripple CTO shares take on ETHgate controversy, XRP holders await SEC opposition brief filing
Ripple loses all gains from the past seven days, trading at $0.50 early on Monday. XRP holders have their eyes peeled for the Securities and Exchange Commission filing of opposition brief to Ripple’s motion to strike expert testimony.
Week ahead: FOMC and jobs data in sight
May kicks off with the Federal Open Market Committee meeting and will be one to watch, scheduled to make the airwaves on Wednesday. It’s pretty much a sealed deal for a no-change decision at this week’s meeting.