Investors on both sides of the Atlantic have been reluctant to make major investments in recent trading days due to the Federal Reserve's upcoming interest rate decision next Wednesday. However, economic data for the USA and the eurozone have repeatedly provided important impetus.
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ISM purchasing managers for manufacturing disappoint - service sector better than expected
The ISM Purchasing Managers' Index for the manufacturing sector, which was published on Tuesday, came in at 48.2 points, slightly below expectations (48.6 points) after 48.7 points in the previous month.
The Purchasing Managers' Index (ISM) for the services sector was published on Wednesday and, at 52.6 points, exceeded expectations (52.1 points) after 52.4 points in the previous month.
ADP data spur interest rate cut fantasies - Official US labor market report will not be published until 16 December
As the official US labor market data (non-farm payrolls) will not be published today due to the now settled US budget dispute, the so-called ADP employment data is likely to have received more attention in the middle of the week. Employment in the private sector fell by 32,000 units last month, following an increase (revised) of 47,000 jobs in October. Experts surveyed by Reuters had expected an increase of 10,000 units. The so-called ADP report is compiled together with the Stanford Digital Economy Lab and can provide a first foretaste of the „NFPs“, which will not be published until December 16 and thus after the Fed meeting. The reports are expected in October and November.
In September, 119,000 new jobs were created outside of agriculture. However, at 4.4 percent, the unemployment rate was at its highest level for four years.
Around a week before the Fed's key interest rate decision on December 10, investors have thus tended to remain cautious. According to the CME Group's „Fed Watch Tool“, 87.2% of market participants currently expect a rate cut of a quarter of a percentage point. However, statements by Fed Chairman Jerome Powell at the subsequent FOMC press conference on the future shape of US monetary policy are likely to be of great importance.
EU GDP grows more strongly than expected compared to the previous quarter
New figures on gross domestic product from the eurozone also attracted attention this morning. In the third quarter, GDP increased by 0.3% compared to the previous quarter. Previously, the economy had only grown by 0.1 percent. Higher investments were cited as the reason for the increase.
US price data and consumer confidence (Uni Michigan) at the end of the week in view
As the week draws to a close, important US price data (core personal consumption expenditures) awaits investors today, which could potentially provide important monetary policy impetus (16:00). This data is seen as an important measure of inflation for the US Federal Reserve. However, the figures are the September data. Experts expect an increase of 2.8 percent compared to the previous year, after 2.7 percent in August.
Finally, preliminary data on consumer sentiment (University of Michigan) should be noted (16:00).
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