ISM’s Service PMI
Some cracks could be starting to appear in the picture of an otherwise resilient U.S. economy.
An abrupt drop in the Institute for Supply Management’s services gauge on Tuesday to a six-year low is the latest in a string of unexpectedly weak data for August. Other less-than-stellar figures include an ISM factory survey showing a contraction in manufacturing; a cooling of hiring; automobile sales falling short of forecasts; and an index of consumer sentiment at a four-month low.
While there is hardly any evidence that growth is falling off a cliff, the run of disappointing figures make it tougher to argue that the underlying momentum of the world’s largest economy is holding up. It also potentially complicates the task of Federal Reserve policy makers, who are debating whether to raise interest rates as soon as this month; traders’ bets on a September move faded further after the report on service industries, which make up almost 90 percent of the economy.
Dollar
The dollar tumbled on Tuesday after economic data showed the U.S. service sector grew at its slowest pace since early 2010, which dimmed expectations for a near-term interest rate increase from the Federal Reserve.
The dollar fell at least 1 percent against the yen, euro, Swiss franc, British pound and a number of other currencies, with the pound rising to its highest level against the dollar since mid-July.
The dollar index dropped 1 percent to 94.821, its lowest since Aug. 26. The index last traded at 94.83.
OIL
Oil prices inched lower on Wednesday as market participants remained skeptical that producers will reach an agreement to freeze output to rein in a global supply glut.
London Brent crude for November delivery was down 4 cents at $47.22 a barrel by 2018 EST, after settling down 37 cents on Tuesday.
NYMEX crude for October delivery was down 8 cents at $44.75, after settling up 39 cents on Tuesday.
Oil prices hit a one-week high on Monday after Russia and Saudi Arabia agreed to cooperate on stabilizing the oil market, but they have since fallen due to the mounting uncertainty over a deal.
Reference: Reuters, Bloomberg, CNBC
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