FXStreet (Łódź) - James Knightley from ING comments on the better than expected US ISM non-manufacturing, which rose to 58.7 in July.

Key quotes

"The headline index is at its highest level since December 2005 while the new orders component posted its strongest reading since August 2005 and business activity is recording its strongest growth since February 2011."

"The employment component also rose strongly, which suggests that the rise in the unemployment rate seen last Friday will swiftly be reversed."

"This is all really encouraging news and with the manufacturing ISM survey also having beaten expectations last Friday it suggests that the US growth story is really gaining momentum after the 1Q weather related weakness."

"Indeed, the indices at levels that have historically been consistent with GDP growth in excess of 4%YoY versus the current rate of 2.4%."

"This is likely to mean growing splits within the Federal Reserve on the outlook for policy with their next forecast update likely to be very interesting."

"We are comfortable being in the group favouring earlier rather than later Fed tightening – we expect rate hikes to start in April."

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