What are the main events to watch today?

The European session doesn’t really have any market-moving events on the agenda as we’ll just get the final readings from the Services PMI and the Eurozone PPI report. The market generally moves the most based on fresh news and especially information that changes future expectations.

Things will get more interesting in the US session with US ADP, BoC policy decision and US ISM Services PMI. ADP is not a major market player, but the market generally responds to it nonetheless. The data is a poor indicator of the NFP data, but it could complement the overall employment picture.

1:45 p.m. GMT/09:45 a.m. ET – BoC policy decision

The Bank of Canada is expected to cut rates from 5.00% to 4.75%. The market-based probability increased to 80% following last week’s weak Canadian GDP data. Expectations were already leaning towards a rate cut after the latest Canadian CPI report where core inflation measures favored by the Bank of Canada surprised on the downside and ultimately fell within the 1-3% target range. The central bank will likely refrain from committing in advance to a further rate cut and say it will be data dependent.


2:00 p.m. GMT/10:00 a.m. ET – US ISM Services PMI

The US ISM Services PMI is expected at 50.5 versus 49.4 previously. The S&P Global PMIs surprised on the upside with the The services, in particular, far exceed expectations. Overall, the report showed that commercial activity reached its highest level in two years. The details also showed that “input costs and product prices have increased at faster rates, with the manufacturing sector becoming the main source of price growth over the past two months.”

However, “the overall rate of sales price inflation remained below the average observed over the past year“. The focus will likely be on the jobs subindex before the NFP report is released, but the data we’ve gotten so far suggests that the U.S. economy is still doing quite well and the job market remains resilient.

ISM Services Index in the United States


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