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3 Jun 2015
US: Mixed data ahead of NFP – ING
FXStreet (Barcelona) - Rob Carnell of ING, reviews the US ADP employment, non-manufacturing ISM and trade balance data, noting that today’s releases would have caught the Fed in a tight spot.
Key Quotes
“Wednesday's data releases have not provided any encouragement to deviate from the herd and forecast a non-consensus payrolls number for this coming Friday. The ADP employment change came in at 201K, within 1K of expectations, and with minimal revisions to the prior months' data (+169K in April), are certainly consistent with the consensus 227K payrolls "guess" (ING f 240K).”
“The other payrolls-relevant data was the non-manufacturing ISM. This went the other way, unfortunately, though in our view is a less reliable indicator of payrolls direction, and the employment index was not down all that much at 55.3 (from 55.7), and remains reasonably positive.”
“Unrelated to payrolls, but helping in putting a slightly brighter picture on 2Q15 US GDP growth, the trade deficit for April narrowed in by about $3bn more than had been forecast to -$40.9bn, which will help to start the unwind of damage that the ports strike did to the 1Q data.”
“That said, the scale of the 2Q15 bounce still looks somewhat constrained, and none of this is making the Fed’s job any easier as the clock keeps ticking, and rates remain at zero. Just as the Fed drops their awkward “forward guidance” approach and adopts a data-dependent policy stance, their hands become tied by the data. There are lessons for all monetary policy makers here. In a world of imperfect foresight, transparency is not always a benefit.”
Key Quotes
“Wednesday's data releases have not provided any encouragement to deviate from the herd and forecast a non-consensus payrolls number for this coming Friday. The ADP employment change came in at 201K, within 1K of expectations, and with minimal revisions to the prior months' data (+169K in April), are certainly consistent with the consensus 227K payrolls "guess" (ING f 240K).”
“The other payrolls-relevant data was the non-manufacturing ISM. This went the other way, unfortunately, though in our view is a less reliable indicator of payrolls direction, and the employment index was not down all that much at 55.3 (from 55.7), and remains reasonably positive.”
“Unrelated to payrolls, but helping in putting a slightly brighter picture on 2Q15 US GDP growth, the trade deficit for April narrowed in by about $3bn more than had been forecast to -$40.9bn, which will help to start the unwind of damage that the ports strike did to the 1Q data.”
“That said, the scale of the 2Q15 bounce still looks somewhat constrained, and none of this is making the Fed’s job any easier as the clock keeps ticking, and rates remain at zero. Just as the Fed drops their awkward “forward guidance” approach and adopts a data-dependent policy stance, their hands become tied by the data. There are lessons for all monetary policy makers here. In a world of imperfect foresight, transparency is not always a benefit.”