The ISM nonmanufacturing index came in stronger than expectations at 53.8 versus 50.8 expected. However, employment remains below 50 at 47.1 (but up from 45.9). The prices paid was lower than last month at 58.1 versus 59.2.
IN the US debt market, yields have moved higher and trade now in positive territory (after trading lower on the day earlier):
- two year yield 4.780%, +1.1 basis point
- 5-year yield 4.367%, +1.6 basis points
- 10 year yield 4.347%, +1.1 basis point
- 30-year yield 4.490%, +0.6 basis points
The USD has moved higher after the report:
- EURUSD moved above the high resistance target at 1.0887 just prior to the report, but rotated lower and is approaching the rising 100-day moving average of 1.08621. A move below 100-hour moving average would have traders looking toward the 200-hour moving average 1.0853.
- THe GBPUSD moved to the low of a swing area on the 4-hour chart between 1.2793 and 1.2802, but is now lower. The low price reached 1.2764. The rising 100-hour moving average comes in at 1.27558. The 200-hour moving average comes in at 1.27494. Those are downside target that need to be broken to increase the bearish bias.
- USDJPY his now trading above the falling 100 hour MA at 156.32. The 200 hour MA remains above as a target at 156.68. Seller in the USDJPY ahead of the ISM services date took the price below a swing level at 155.95, but the price snapped back higher on the better headline number.
Despite the ISM services, the markets are still increasing the probability of a Fed rate cut for September and November:
Fed rate cut probability increases