US: Data needs to outperform extraordinarily to re-kindle appetite for USD - ANZ

Analysts at ANZ explain that with policy convergence becoming a growing theme the US data will need to outperform extraordinarily to re-kindle markets’ appetite for the dollar.

Key Quotes

“The ISM indices will give us a hint as to whether US growth momentum is picking up once again. Later in the week, the ADP employment figures will set the stage for the NFP print on Friday. We will be particularly focussed on wage growth as a signal as to whether the Fed has cause to maintain its tightening stance. That said, given the market has priced the FOMC to raise rates just one more time until the end of 2018, sensitivity to any disappointment in next week’s data is limited.”

“FOMC: Fed’s officials still need to convincingly explain why they expect the recent weakening in inflation to be transitory. While the minutes may provide some clarity on this front it will not be enough to sustainably drive the USD.”