US ISM Manufacturing Index came in at 49.0, below expectations of 50.7 and previous data of 50.7. Ironically this led to triple-digit gains in the US stock markets and apparently reinforced the idea that the Fed will not begin the tapering for at least a few months. Typically the ISM manufacturing index is a sign that the stock market should rise, as the excesses in manufacturing should point to increased profits from companies however the opposite held true (in terms of stock market response) due to the interesting situation of waiting for the taper to begin.
Australian GDP year over year came in at 2.5%, below the expected numbers (2.7%) and below the previous of 3.2%.This is the lowest rate of growth in the past two years for Australia, bringing up the possibility of more interest rate cuts in the hope of stimulating growth. This contraction adds more weight to the global slowdown that we are experiencing.
ECB met and discussed deposit rates and interest rates. They decided to keep the deposit rate at an even 0.00% and the interest rates at 0.5%. The earlier cut in rate of .25% was in response to the economic slowdown and Draghi said "economic and survey data have shown some improvement" while reasserting that improved financial market confidence should eventually work its way into the real economy. During the meeting, policy makers discussed a range of other measures, including long-term refinancing operations, asset-backed securities, collaterals and credit claims.
US non-farm Payroll came in above the expected 163,000 at 175,000 jobs created. Considered the most important job creation statistic, an increase in NFP usually correlates with higher employment and inflation fears, which are often countered by the Fed with rate increases. Although higher than the official forecast, the NFP numbers were lower than the high forecasted of 200,000 placing the numbers right in the middle of the positive spectrum for results.
US unemployment rose by 0.1% from the forecast and previous number of 7.5% to 7.6%. As one of the main targets for the US Fed's QE policy, this is one of the strongest indicators that the tapering is not near ready to begin in the next month or two. The target for unemployment has been stated at 6.5%, so there is still a whole 1% to be overcome before the Fed seriously considers tapering, according to their statements.
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