-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Global Macro Weekly -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI INTERVIEW: OPEC Cuts A Headwind To Services - ISM
Institute for Supply Management services chair Anthony Nieves told MNI OPEC production cuts present a fresh headwind to the sector but he continues to expect moderate growth through the end of the year, while closely watching manufacturing as a lead indicator of a contraction.
"It will buffet prices for sure," he said, soon after OPEC announced an agreement for production cuts of 2 million bpd. "We need to see where fuel prices go." The ISM report suggested that price pressures declined in September, with the prices paid measure down 2.8pt and supplier deliveries dropping 0.6pt.
While he expects further moderation, Nieves acknowledged the divergence in prices paid measures in the manufacturing report at 51.7 versus services at 68.7. Manufacturing is "buying more on the raw material side. You're getting finished goods and services on the services side," he said. "It's being pulled through the supply chain with all the layers added to it and so it's going to definitely take longer for that to fall" in services.
The ISM services index declined 0.2pt to 56.7 in September, above expectations for a larger decline. The underlying composition was mixed, as the employment component increased 2.9pt to 53.0, but business activity was down 1.8pt to 59.1.
The report showed new export orders index increased by 3.2pt to 65.1. "It's telling us what companies see in the pipeline for them," he said, adding the subindex could soften in coming months to the mid to high 50s. "The cycle time is not as long as on the manufacturing side so it wouldn't be unrealistic to see that drop down."
WATCHING MANUFACTURING
Nieves expects the services sector to see moderate growth through the end of the year but said it is now harder to get clear economic signals from the data. "In the past we could see things seasonally, but the pandemic has kind of thrown seasonality a bit out the window," he said.
"For services, it's definitely showing that it's going to continue and yet I always look at manufacturing as the bellwether. In the past, they've always led into downturns in the economy and they've also led coming out of downturns in the economy. So, I'm keeping an eye on that." The ISM manufacturing report for September was weaker than expected and the weakest since May 2020 and chair Timothy Fiore told MNI the sector is slowing and could contract in coming quarters.
"If things change, the dynamics change, especially on the manufacturing side, and we see them going into contraction territory for a trend of three months then we have to really raise the antennae," Nieves said.
The services sector is holding up despite the Federal Reserve's historically fast tightening cycle this year, Nieves said, drawing comparisons to manufacturing. The service sector "just kind of weathers things differently," he said. "This is like a diverse stock portfolio. When you look at the services sector it is 18 industries that are very eclectic. It weathers change more so than what you see on the manufacturing side."
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.