Manufacturing dominates headlines ahead of NFP’s

Yesterday’s markets

2nd October 2015

  • CHF Retail Sales y/y: -0.3%
  • Spanish Manufacturing PMI: 51.7
  • UK Manufacturing PMI: 51.5
  • US Unemployment Claims: 277K
  • US ISM Manufacturing PMI: 50.2
  • FOMC Member Williams Speaks
  • AUD Retail Sales m/m: 0.4%

Yesterday, movement was relatively subdued as the market anxiously awaits the release of the  Non-Farm Pay Rolls despite a raft of manufacturing data being released from the UK and US. Firstly, UK manufacturing PMI posted a slightly better than expected 51.5, however it was the lowest level in three months. Although the performance wasn’t ground breaking, last month’s figure was revised higher and the reading showed that the sector has remained in expansion now for nearly two and a half years.

US ISM Manufacturing showed that pace of growth in the U.S. manufacturing sector slowed in September while remaining at its lowest level since May 2013. The Institute for Supply Management (ISM) said its index of national factory activity fell to 50.2 from 51.1 the month before. The reading was shy of the expected 50.6 and is fairly anemic. Importantly, ahead of today’s jobs data the employment index slipped to 50.5 from 51.2 to remain at its lowest level since April.

On other news, weather forecasts in the US are closely monitoring Hurricane Joaquin as it approaches the Bahamas. Hurricane Joaquin is scheduled to make landfall in the Bahamas today and if the category 3 Hurricane reaches the States it could have a detrimental effect on US output.

Today’s markets

1st October 2015

  • Spanish Unemployment Change
  • UK Construction PMI
  • UK Average Hourly Earnings m/m
  • US Non-Farm Employment Change
  • US Unemployment Rate
  • US Factory Orders m/m
  • FOMC Member Fischer Speaks

Today is going to be dominated by the US jobs data. Since the FOMC kept rates on hold two weeks ago they have been hawkish in their commentary, suggesting that a rate hike is expected in 2015. Positive job figures will be required to keep these elevated expectations maintained. Meanwhile, the UK construction data is also scheduled.