Thursday 6th October 2022

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Yesterday’s vain hope of a pivot by the Fed, to slow down rate rises after the weaker job openings numbers, were destroyed today by a stronger than expected non-manufacturing ISM read. Not only was the main number higher than anticipated, at 56.7, new orders were strong too. It was another of those good news is bad news moments, because its unlikely the Fed will consider any slow down in their path of rate hikes when the economy is showing strong growth against a tight labour market. On that, the ADP employment numbers reported wages growing at 7.6 percent in September. This could be an unfortunate precursor to the non-farm payrolls numbers on Friday. The day’s other big news is the OPEC+ decision to cut oil by two million barrels a day – a move which could add to inflation pressures.

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