It’s the biggest week of the month for US data. We got surprisingly firm ISM data this morning and a get a reading on the much-larger service sector on Wednesday. We also get the increasingly useless ADP report (as it pertains to working out any one month’s US employment report) on Wednesday.
Thursday we get claims and factory orders and Friday we get unemployment and consumer credit.
US data is less a driver in the near-term now that the Fed has launched its open-ended QE program than previously but at the margin, weal data will suggest a more aggressive Fed within that framework while better run of data will imply that the Fed will do less, a plus for the dollar.
EUR/USD is consolidating roughly in the middle of its overnight rally after reaching near 1.2940 after EUR/USD squeezed higher following a false break of the 200-day moving average in Asia overnight. An upbeat reaction from European equities to the Spanish stress tests and modestly upbeat ISM data helped improve risk sentiment early on.
