A soft ISM services report could truly turn the market

<p>The US dollar has completely reversed the non-farm payrolls number and more. At the top of the hour we get the December ISM srevices report, which is expected to tick down to 52.6 from 52.7.</p><p>Remember, the jobs report is a lagging indicator while the ISM services report is one of the best leading indicators. </p><p>The ISM data spent all of 2023 in a relatively narrow range and is set to finish right in the middle of it. </p><p>All told, a reading around 52 is just 'ok' for the economy and compares to the 2010s average of around 55. Though for the short-term, the direction is more-important than the ultimately level.</p><p>Beyond the headline, the number to watch will be prices paid, which was at 58.3 in November. Secondly, a strong/weak employment reading will be an important confirmation/rejection for the non-farm payrolls data.</p><p>Finally, the market clearly leaned into a strong jobs report and we've seen that unravel quickly. Some of the rotation and profit-taking in equities is done and I think that's laid out a clean slate for the remainder of the month.</p>

This article was written by Adam Button at www.forexlive.com.