Barclays economist Michael Gapen......>

US DATA REACT: Barclays economist Michael Gapen said July US ISM

non-manufacturing index "moderated more than expected, falling to 53.9 from 57.4

last month. Our and consensus expectations were for a smaller decline (Barclays:

56.5, consensus 56.9). The main miss relative to our expectations came in the

areas of business activity, which dropped to 55.9 from 60.9, and new orders,

which declined to 55.1 from 60.5. Both were larger than we had anticipated."

- He adds "order backlogs, supplier deliveries, inventory changes, employment,

and new export orders all moderated slightly, while remaining in expansionary

territory. The reading on the headline series is the weakest since August 2016,

when the economy was beginning to stabilize following the slowdown in activity

from a stronger dollar and weaker energy prices. At 53.9, the index is also

broadly in line with its reading last October (54.6), prior to the presidential

election, and signals the post-election surge in sentiment has fully retraced."

He adds that "we still see the report as consistent with modest growth in

economic activity in Q3."