The US dollar has completely reversed the non-farm payrolls number and more. At the top of the hour we get the December ISM srevices report, which is expected to tick down to 52.6 from 52.7.
Remember, the jobs report is a lagging indicator while the ISM services report is one of the best leading indicators.
The ISM data spent all of 2023 in a relatively narrow range and is set to finish right in the middle of it.
ISM services
All told, a reading around 52 is just ‘ok’ for the economy and compares to the 2010s average of around 55. Though for the short-term, the direction is more-important than the ultimately level.
Beyond the headline, the number to watch will be prices paid, which was at 58.3 in November. Secondly, a strong/weak employment reading will be an important confirmation/rejection for the non-farm payrolls data.
Finally, the market clearly leaned into a strong jobs report and we’ve seen that unravel quickly. Some of the rotation and profit-taking in equities is done and I think that’s laid out a clean slate for the remainder of the month.