Today 05/11/09 forex news
The Institute for Supply Management’s (ISM) non-manufacturing business index fell 0.3 percentage points in October to 50.6 from 50.9 in September. Economists were expecting the index to rise to 51.5.
This moderate decline in the index can be attributed to declines in employment, inventory, and imports which outweighed the growth reported in price and new export orders. Imports, inventories and employment contracted. Imports fell 5.5 percent to 46. Inventories contracted 4.5 percent to 43. The employment index fell 3.2 percent to 41.1. New export orders rose 5 percentage points to 53.5 and prices rose 4.2 percentage points to 53.
The major knowledge to come out of the report was that new export orders had their best showing since October 2007, but the headline number was pulled down by the disappointing drop in the employment component, which saw its worst reading since May.
The employment component pullback counters the brief optimism after Monday’s much-improved ISM manufacturing report, which showed an increase of 6.9 points in the employment component to 53.1. However, The ISM manufacturing report has more history behind it than ISM services, and has a tighter correlation to the NFP report on Friday. Manufacturing only makes up about 9% of non-farm payrolls as opposed to 69% for private services, but manufacturing employment can be quite volatile, so it can heavily sway the payrolls readings.
In total, FX traders should know that the net effect of today’s ISM reports should not be significant, with perhaps a little more risk of a slightly weaker than expected number. Combined with this morning’s as-expected ADP report, there probably won’t be any major NFP forecast revisions from the end of last week, when Reuters showed a median nonfarm payrolls forecast of -175k.
Nevertheless, today’s news contributed to a broad-based rally in the Eurodollar, as seen in the below chart. This indicates that many easy FOREX traders may have been expecting major disappointments, and thus today’s roughly as-expected actual figures were in effect a positive surprise, contributing to Euro strength and Dollar weakness. Tonight’s FOMC statement will likely have a strong impact on how the Eurodollar actually finishes the session.
forex Ism Adp news
Tags: Adp, easy forex, easy FOREX traders, forex Ism Adp news, FOREX traders, Ism, Reuters
November 7, 2009 at 2:44 pm |
Nice info. Thanks for share.
November 16, 2009 at 5:48 pm |
good articles
November 18, 2009 at 2:06 pm |
nice post btw