FXStreet (Guatemala) - James Knightley, analyst at ING bank noted that after that pretty poor employment report we have actually got a very robust ISM manufacturing index.
“It has risen to 57.1 in July from 55.3 in June, leaving the index at its highest level since April 2011. Interestingly, the employment component surged to 58.2 from 52.8, taking it to its highest level since June 2011, contradicting today’s softish jobs numbers”.
“Production is up at 61.2 versus the break-even 50 level while new orders jumped nearly 5 points to 63.4. This is all really good news for the US growth story with the headline ISM index at levels historically consistent with GDP growth running at 4%YoY versus the current rate of 2.4%”.
“It also backs up our positive assessment on the US economy and our view that the labour market will continue to strengthen, inflation pressures will build, the dollar will rally a lot further and the Fed will tighten earlier than the market currently anticipates”.