5 August 2008 Tuesday 14:29
ISM Services Improve ahead of the FOMC's rate decision
Today the Federal Open Market Committee meeting is the highlight of the day as the Federal Reserve Board will decide on the interest rate decision in which expectations show that they will keep them steady at 2.0%. The Feds are doing all that it takes to stabilize financial markets as this is negatively affecting the economy adding to the despair of the falling housing prices. Services came in today surprising the markets since the reading came in higher than it was predicted yet still in contraction.
The U.S. released its ISM-non manufacturing coming in at 49.5 higher than both expected reading of 48.7 and the prior reading of 48.2. Since the reading is still under 50 it is showing that it is in contraction.
Taking the ISM services in details we see that the employment increased to 47.1 from 43.8 showing that the labor market is slightly picking up pace, a positive sign towards the economy since more workers will now be receiving money so they can spend and help stimulate U.S. growth, yet already the data lost effect since they lagged after the nonfarm payrolls figures for July.
We also see that the backlog orders gained 52.0 from 49.0, supplier deliveries increased to 53.5 from 50.5 a sign that demand is somewhat increasing despite the fall in new export orders which slipped to 47.5 from 52.2 due to weaker overseas demand as a result of the global slowdown. Prices paid fell to 80.8 from 84.5 as inflation ease with rising spare capacity while business activity slipped to 49.6 from 49.9.
The greenback remains strong in the markets as a result of anticipations that the Feds might have a hawkish tone in order to contain inflation. If these speculations are correct, then the dollar will continue its gains in the markets.
Late today we wait for the FOMC meeting to somewhat understand the outlook of the U.S. economy, hoping that it will be a bright one…
ISM Services Improve ahead of the FOMC's rate decision
Today the Federal Open Market Committee meeting is the highlight of the day as the Federal Reserve Board will decide on the interest rate decision in which expectations show that they will keep them steady at 2.0%. The Feds are doing all that it takes to stabilize financial markets as this is negatively affecting the economy adding to the despair of the falling housing prices. Services came in today surprising the markets since the reading came in higher than it was predicted yet still in contraction.
The U.S. released its ISM-non manufacturing coming in at 49.5 higher than both expected reading of 48.7 and the prior reading of 48.2. Since the reading is still under 50 it is showing that it is in contraction.
Taking the ISM services in details we see that the employment increased to 47.1 from 43.8 showing that the labor market is slightly picking up pace, a positive sign towards the economy since more workers will now be receiving money so they can spend and help stimulate U.S. growth, yet already the data lost effect since they lagged after the nonfarm payrolls figures for July.
We also see that the backlog orders gained 52.0 from 49.0, supplier deliveries increased to 53.5 from 50.5 a sign that demand is somewhat increasing despite the fall in new export orders which slipped to 47.5 from 52.2 due to weaker overseas demand as a result of the global slowdown. Prices paid fell to 80.8 from 84.5 as inflation ease with rising spare capacity while business activity slipped to 49.6 from 49.9.
The greenback remains strong in the markets as a result of anticipations that the Feds might have a hawkish tone in order to contain inflation. If these speculations are correct, then the dollar will continue its gains in the markets.
Late today we wait for the FOMC meeting to somewhat understand the outlook of the U.S. economy, hoping that it will be a bright one…
