by James Knightley
ING
Markets have been re-pricing the prospect of Federal Reserve rate cuts this year in the wake of more hawkish Fed commentary. Today’s data suggests that the economy is maintaining its strong momentum and that inflation continues to be sticky with concern over tariff implementation starting to impact corporate thinking and behaviour.
Election clarity is helping to lift activity
We have been suggesting that that the clarity provided by the clean election outcome would lead companies that delayed investment and hiring on election/regulatory uncertainty to start putting money to work. That is seemingly the case based on the latest ISM purchasing managers’ indices. Last week’s manufacturing showed both output and news posting decent gains and today’s services ISM index has also come in stronger than expected with the headline reading rising to 54.1 from 52.1, above the 53.5 consensus.