01 February 2012 at 22:27 GMT
The three upcoming events in this morning's
Macro Update - 3 numbers to watch today were all well received by a market saturated by risk sentiment - even if both ADP and ISM missed expectations.
- Portugal sees higher yields: The yield demanded by investors in today's 105- and 168-day bill auctions declined compared with the last such auction on 18 January with the 3-month bill averaging 4.068 percent and the 6-month bill 4.463 percent. The auctions were oversubscribed more than two times over with bid-to-cover ratios of 2.81 and 2.65, respectively, alleviating some of the fears surrounding the struggling economy. Having said that, the acid test for Portuguese bonds comes at auctions for longer-dated debt.
- The labour market continues to improve in the US: The US labour market continues to improve even though ADP Employment Change only added 170,000 in today's report for January vs. 292,000 in December. Despite the lower net change in employment, this was a robust report and gives a better picture of the health of the labour market since the December report was distorted by seasonality resulting in an abnormally big gain (see our ADP review). Today's ISM Manufacturing report (see below) was solid with gains in the Employment component and we can now sit back an relax ahead of Friday's US Employment report*.
- ISM Manufacturing miss expectations: As detailed in our ISM Manufacturing review the slight miss in the headline was more than outweighted by the underlying components, we believe. The new orders index rose markedly and points to continued growth ahead while the employment index signals expansion in manufacturing jobs, an interesting piece of news ahead of Friday's Employment report.
In addition we had some rather uplifting news on European PMI Manufacturing.
* Tomorrow's Initial Jobless Claims figure, while important on its own, does not matter for Friday's Nonfarm Payrolls number.