USD shrugs off weaker NFP as ISM hits 6-year high

Summary:

US NFP shows 156k jobs added in August vs 180k exp and 189k prior
ISM manufacturing PMI rises to 6-year high at 58.8
UK manufacturing also beats forecasts fter increasing to 55.3
Cryptocurrencies have enjoyed another strong week with several all-time highs

The much talked about seasonal weakness in the August payrolls numbers has shown itself once again with today’s release making it 17 out of the last 21 for this month that have missed consensus forecasts. The release of 156k is not too bad as a stand alone figure, but when the downwards revisions to the previous readings and the fall in average earnings are taken into account it is something of a disappointment.

The final major economic release of the week has seen the US ISM manufacturing PMI rise to 58.8 – its highest level since 2011. The reading was well above the 56.5 expected and the 56.3 seen previously and suggests the sector is in a good place.

Earlier on, the UK’s manufacturing PMI unexpectedly moved up in August from 55.3 (revised up from 55.1) to 56.9 quite easily beating the consensus at 55. It’s worth underlining that all five components – output, new orders, employment, supplier’s delivery times and stocks of purchases – were consistent with a stronger performance for the manufacturing industry during August, the IHS Markit said in a note. The pound has enjoyed a good week and the release has seen further gains made heading into the weekend.

Cryptocurrencies have also been in a bullish mood this week, with Bitcoin reaching another all-time high and closing in on the $5000 handle. The story which came from China could act in favor of a slowdown in the Bitcoin’s price action. Namely, according to China’s National Internet Finance Association, launches of new digital currencies, known as initial coin offerings (ICOs), have shaken up social and economic order, created hidden financial risks, and in some cases may amount to fraud.