Previous Trading Days Events 05.06.2024

According to the ISM report yesterday, the S. services industry growth slowed a bit in February. The ISM said its nonmanufacturing PMI slipped to 52.6 last month from 53.4 in January amid a decline in employment. The PMI figure however, was consistent with continued economic expansion.

There were also no signs that inflation was picking up after a jump in prices at the start of the year, welcome news for Federal Reserve officials. Though financial markets expect the U.S. central bank to start cutting interest rates this year, the timing is uncertain because inflation remains high, with most of the price pressures coming from services.

While the easing of price pressure and moderation in hiring tilt this report in a dovish direction, the Fed will ultimately want to see these developments translate to the hard data on inflation and job growth, said Tim Quinlan, senior economist at Wells Fargo in Charlotte, North Carolina.

The underlying trend suggests that services inflation will remain on a downward trend in the first half, with some risk that it may not cool as quickly as Fed officials would like, said Oren Klachkin, financial market economist at Nationwide.

Sources

httpswww.reuters.commarketsususservicessectorcoolsfebruaryismsurveyshows20240305

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