US: Data has not really encouraged recession talks – Westpac

According to Sean Callow, analyst at Westpac, the mood over US-China trade has obviously improved quite a bit but US data has not really encouraged recession talk lately.

Key Quotes

“After the dismal sub-50 print on the Aug manufacturing ISM, the key Aug services sector reading was a great relief, the ISM bouncing to 56.4 (vs 53.8 in China, 53.5 in the Eurozone).”

“The Aug employment report should not have upset the Fed either, with NFP growth of 1.4%yr, a 3.7% unemployment rate and 3.2%yr earnings growth surely consistent with the consensus FOMC forecast.”

“Resilient growth but sub-target inflation and ongoing international political risks argue for a 25bp cut with no explicit commitment to further easing. This should leave DXY higher on the week, probing above 99.”