• ISM non-mfg. accelerates in October, employment index strengthens too
• Investors remain confident about a 25bps rate cut this week; dollar barely rises

 

The ISM non-manufacturing PMI index came in favor of Biden’s administration on Tuesday, arriving stronger than expected as US voters headed to the polls to elect the next President.

The survey for October showed surprisingly increased business activity for the second consecutive month, with the index rising to 56.0 – the highest in more than two years – versus analysts’ forecast of 53.8 and September’s reading of 54.9. Strikingly, the employment sub-index rose significantly to 53.0, stemming instantly a two-month decline and price pressures eased as expected to 58.1 from 59.4 previously.

There was no drastic reaction in FX markets besides a negligible uptick in the US dollar which immediately fizzled out as the data barely eased the odds for a 25bps rate cut this week. Note that investors are certain that the Fed will deliver a single 25bps rate cut on Thursday.

USDJPY stood steady around 152, while EURUSD and GBPUSD retained their moderate intra-day gains near 1.0900 and 1.3000 respectively.

In stock markets, US indices edged gently higher as gold continued to trade quietly near its opening price of $2,736.

In the meantime, there is nothing more important than the US election at the moment and investors could stay on the sidelines until the results start to roll in. Hence, stay tuned for more action in the coming sessions.