What are the main events to look out for today?

The European session doesn’t really have market-moving events on the agenda as we will just get the final readings on the Services PMIs and the Eurozone PPI report. The market generally moves the most on fresh news and especially on information that changes the future expectations.

Things will get more interesting in the American session as we have the US ADP, the BoC Policy Decision and the US ISM Services PMI. The ADP isn’t a big market mover but the market generally reacts to it nonetheless. The data is a poor predictor of the NFP data but it might complement the overall jobs picture.

13:45 GMT/09:45 ET – BoC Policy Decision

The BoC is expected to cut rates from
5.00% to 4.75%. The market-based probability jumped to 80% chance following the
soft Canadian
GDP data last week. The expectations were already leaning toward a rate cut after the
last Canadian
CPI report where the BoC’s preferred underlying inflation measures
surprised to the downside and finally fell inside the 1-3% target band. The
central bank will likely refrain from pre-committing to another rate cut and
state that it will be dependent on the data.

BoC

14:00 GMT/10:00 ET – US ISM Services PMI

The US ISM Services PMI is expected at
50.5 vs. 49.4 prior. The S&P
Global PMIs surprised to the upside with the Services measure in particular
beating expectations by a big margin. Overall, the report showed that business activity expanded to a
two-year high. The details also showed that “both input costs and output
prices rose at faster rates, with manufacturing having taken over as the main
source of price growth over the past two months.”

However, “the overall
rate of selling price inflation remained below the average seen over the past
year”. The focus will likely be on the
employment sub-index ahead of the NFP report but the data we got until now
suggest that the US economy is still doing pretty well, and the labour market remains resilient.

US ISM Services PMI