US ISM non-manufacturing dropped to 60.3 in October, down from 61.6 but beat expectation of 59.5. Employment index dropped -2.7 to 59.7. ISM noted the reading respresnets “continued growth in the non-manufacturing sector at a slower rate.”And, the sector “again reflected strong growth despite a slight cooling off after a record month in September”. However, there are “continued concerns about capacity, logistics and tariffs. ”
Some quotes from the respondents:
- “Tariffs are beginning to impact business. We ask our suppliers to hold pricing for six months, but we are experiencing difficulties.” (Construction)
- “Wrapping up fiscal year budgets [and] seeing modest increases in volume and spend. Some price increases due to tariffs on computers/peripherals.” (Finance & Insurance)
- “It has been very difficult to make decisions due to instability brought by the latest trading dispute. In this environment, clients tend to postpone capital-expenditure decisions.” (Mining)
- “The promotional-products trade continues to stay strong going into the end of the year. This reflects the overall macroeconomics of how the economy is doing thus far. We have not yet begun to see the impacts on prices due to the additional tariffs against China. We anticipate that price increases may start to work into the supply chain early in the first quarter.” (Management of Companies & Support Services)
Today’s top mover: GBP/CHF ready to resume rise from 1.2457
GBP/CHF is so far the biggest mover for today. The race is actually quite tight with GBP/USD, GBP/JPY and NZD/CHF.
Anyways, GBP/CHF’s rebound from 1.2755 accelerates further higher today and focus is now on 1.3115 resistance. Decisive break there will confirm resumption of whole rise from 1.2457. This will remain the favored case as long as 1.2964 minor support holds. Though, break of 1.2964 could prompt near term reversal.
Prior break of 1.3049 support turned resistance suggests that whole decline from 1.3854 has completed at 1.2457. Such decline displayed a three wave corrective structure. The reversal also came after drawing support from 61.8% retracement of 1.1701 (2016 low) to 1.3854 (2018 high) at 1.2523. So overall, the fall from 1.3854 to 1.2457 should be a counter trend move. And, the current rise from 1.2457 is likely along the larger main trend. Hence, on decisive break of 1.3115, GBP/CHF should target 100% projection of 1.2457 to 1.3115 from 1.2755 at 1.3413 in near term.