The monthly report from the Institute of Supply Management is set to be released today 3 February 2014. At this point, many experts have stated that they foresee a slight drop in the levels of production that could be evident in the January report in comparison with that of the previous month of December 2013.
Analysts remind readers that the ISM report is a significant economic indicator in that it helps to provide an insight into the level of American productivity. Moreover, along with reports like the Non-Farm Payrolls and the CPI reports, it helps experts map trends in the economy.
Analysts note that there has been a slight drop in the pace of growth in the US economy that could potentially depress the productiveness of the American workers. The slowed job growth in December may have added more weight to this. That said, economists are eagerly awaiting the US employment numbers which are slated for release later this week, which could help shed some light on the current state of the economy.
Traders are advised to watch for possible shifts to the trading of the US dollar following the release of this report.
Reserve Bank of Australia to Announce Rate Decision
Australia's central bank is due to declare their interest rate decision today Monday 3 February 2014. As in previous months, most experts do not expect to witness any changes to the current rate.
Readers are reminded that these rates relate to the interest on borrowing costs that can affect all levels of the market, including loans and mortgages. As such, any shifts to these rates can have a significant influence on the nation's economy. In addition, this rate is often used as a key tool by the central monetary authorities to control inflation, as well as to expand and contract growth.
Analysts note that the Australian central bank has been struggling with the short selling of its currency by international traders. Additionally, the Reserve Bank is attempting to tackle issues of employment and inflation.
Traders are advised to watch for possible shifts to the trading of the Aussie following the release of this report.
Kiwi Job Numbers to Come Out Monday
The Unemployment Rate report for New Zealand is expected to be issued tomorrow 3 February 2014. The report will detail the changes in employment for the fourth quarter (Q4) of 2013. At this time, experts are yet to put forth their prediction regarding which direction the rate will likely turn.
Readers are reminded of the importance of the Unemployment Rate in dictating national policies, and in driving the economy. Low employment means that consumers are more likely to feel negative about the economy, less likely to spend, and in general can depress growth. If fewer people are employed, or feel negative about their long term financial futures, then they will not be active participants in the economy.
As New Zealand is a small island economy, creating additional jobs can be difficult. They are highly dependent on neighboring Australia, as well as major regional actors such as China and Japan. Any shifts there are likely to have an influence on the Kiwi's economy, and thereby on their job market. Analysts point to the recent announcement by the Chinese that they will slowdown production levels as a possible indicator that the New Zealand employment sector may feel some effects in the near future.
Regardless of these recent developments, traders are advised to watch for fluctuations in the Kiwi's trading following the release o this report.