ISM Beats, RBNZ Holds

The ISM non-manufacturing survey beat estimates and the RBNZ left rates unchanged. The kiwi was the best performer while the yen resumed its decline. The Australian employment report is the highlight of the upcoming session. Yen crosses from latest premium Insights remain in progress and so are both EURUSD trades

The ISM services index climbed to 54.7 in November compared to 53.5. New orders at 58.1 compared to 54.8 contributed to the surprise but employment was nearly in contractionary territory.

The soft ISM reading on jobs suggests tomorrows non-farm payrolls could be weak but the ADP report showed 118K jobs in the month compared to 125K expected.

The New Zealand dollar rallied after the RBNZ held rates at 2.50%. The neutral decision was no surprise but the commentary was upbeat and diminished the chance that officials will cut rates within the next 12 months.

Yen crosses moved higher after two days of declines. The rise came after a Nikkei story that suggested the LDP could win a strong mandate that would allow it to dictate new easing measures to the BOJ.

The focus on Australia continues this week with the November employment report at 0030 GMT. The consensus is for a flat reading after a 10.7K rise last month. The Aussie has been resilient to negative news this week while easily climbing higher when its fortunes are better.

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-AB