U.S. Economic Indicators Weaken This Week: Focus on ADP Employment Data and ISM Non-Manufacturing Index
The main event this week is the U.S. employment report on Friday. Leading up to this, a series of U.S. economic indicators have been showing weakness, putting selling pressure on the dollar. The U.S. ISM Manufacturing PMI, released on Tuesday, fell short of expectations, and yesterday’s JOLTS job openings report also missed previous figures and forecasts. This has heightened concerns about a slowdown in the U.S. economy, with market speculation growing that the rate cut in September may shrink from 50bp to 25bp.
Several important economic indicators are set to be released today as well. The key ones include the U.S. ADP Employment Change (August), Nonfarm Productivity and Unit Labor Costs (final Q2), U.S. Initial Jobless Claims (August 25-31), U.S. PMI (final August), and the ISM Non-Manufacturing Index (August).
If all of these indicators show weakness, selling pressure on the dollar is likely to intensify. However, with multiple data releases, mixed results could lead to a more complex impact on the dollar’s movement. Additionally, with the U.S. employment report coming tomorrow, a reversal might occur after the initial market reaction to today’s releases.
In terms of scheduled speeches and events, we have a speech by Holzmann, the Austrian Central Bank Governor, and the release of the U.S. weekly oil inventory report.
For key European indicators, attention is on the Eurozone Retail Sales (July) and the Construction PMI for Germany and the U.K. (August). Eurozone Retail Sales are expected to rise 0.2% month-on-month and year-on-year, recovering from the previous month’s decline of -0.3%.
Strategy:
I plan to focus on the movement of the U.S. dollar following the ISM Non-Manufacturing Index, which will be released, and take positions according to the subsequent trend.
