ISM non-manufacturing survey silences the dollar bears
Two economic data points painted a very-different picture of the US economy.
The ADP employment report showed just 27K jobs in May compared to 185K expected. That set off a wave of US dollar selling on expectations for a Fed cut. The fear peaked minutes after the report with many (rightfully) pointing out that it's just one report and one that can be volatile however the dollar remained lower.
Ninety minutes later the ISM non-manufacturing survey rose to 56.9 from 55.5 in a show of surprise strength. That set the US dollar on course to complete the U-turn and now it's extended beyond that. EUR/USD is at the lows of the day at 1.1238.
The ebb and flow of the risk trade has played a role as well but the overall theme is intact and spreads across the board.
What's interesting is that the bond market hasn't let up. US 2-year yields are still down 5.5 bps to 1.83%. That's 6 bps from the lows but continues to point towards rate cuts.
