Market news 04.01

Judo Bank's Australian Services PMI was forecast at 47.6 but actually fell to 47.1, remaining in contraction territory.

Additionally, Australia's aggregate PMI fell from 47.4 to 46.9.

According to the latest Purchasing Managers' Index (PMI) statistics from Judo Bank, Australia's services sector is once again in decline territory.

The seasonally adjusted rate rose from 46.0 in November to 47.1 in December, although contraction in services sector activity was reflected by a third straight reading below 50.0.

Since the third quarter of 2021, the rate of decline in activity in the services sector has been the fastest.

Judo Bank economist Matthew De Pasuale noted that the composite manufacturing indicator ended the year at 46.9, slightly higher than in November. According to data collected over the past two months, the economy is slowing, but not at a very fast pace. The new orders index fell to 46.7 in December, its lowest level since late 2021, marking its third straight month of decline. The output and new orders index remained stable, in line with the Reserve Bank of Australia's forecast of a "soft landing" for the Australian economy, although households are still feeling pressure from rising interest rates.

GBP/USD remains stable at 1.2650 as investors turn their attention to US data.

The GBP/USD currency pair is struggling to gain momentum after falling on Tuesday.

UK data was lacking this week, leaving investors focused on US data.

Although the GBP/USD currency pair failed to recover from Tuesday's sharp fall, it is still hovering around the 1.2650 level.

The ISM US manufacturing purchasing managers' index (PMI) came in at 47.4 in December versus an expected 47.1, a modest increase from November's reading of 46.7, beating forecasts but still in contraction territory.

Fed officials are trying, with limited success, to calm fickle market expectations that Jerome Powell's proposed Fed reform failed to address.

ADP's December employment change data will be released on Thursday, ahead of Friday's US nonfarm payrolls (NFP) report. However, the correlation of indicators with more complete data has recently been inconsistent.

NFP results are expected to decline from 199 thousand to 168 thousand on Thursday, while the ADP employment index is expected to increase from 103 thousand to 115 thousand. It is also reasonable to expect previous data updates.

In December, the ISM US Manufacturing PMI delivered a welcome surprise.

For the second month in a row, December saw an increase in economic activity in the US manufacturing sector. The ISM manufacturing PMI beat the market consensus of 47.1, rising to 47.4 from 46.7 in the previous month.

Additional information from the press release showed that the ISM Producer Price Index fell to 45.2, the ISM Manufacturing New Orders Index fell to 47.1, and the ISM Manufacturing Employment Index rose to 48.1 (from 45.8). .

Meanwhile, the dollar index (DXY) fell from 102.60, its highest level in nearly three weeks, to the 102.30 area. This is in response to JOLT's November job opportunity statistics being lower than expected (8.79 million).

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