JPY Tankan Large Manufacturer's Outlook came in at 10 vs the expected 7, at its highest since Q4 of 2007. This outlook measures business trends such as anticipated profits and capital investment. The weakened Yen has helped the anticipated Japanese exports and since so much of the Japanese economy consists of exports it is a large indicator of the future direction.
US ISM Manufacturing Index came in at a three month high of 50.9 vs the expected 50.5. The rise shows an increase in optimism for the US to lead growth in the second half of the year. The forecast was put together through a median of 85 economists polled. “The pace of activity at the global level is moderate and stable,” said David Hensley, director of global economic coordination at JPMorgan Chase & Co. in New York. “We are not at a point yet where we are seeing a significant pickup in the growth rate. Our outlook is for growth to pick up a bit, though not extraordinarily so.”
US Unemployment rate came in at 7.6% vs the expected 7.5%. Unemployment has been one of the main areas of concern for the US Fed, having announced that the rate they are looking for before increasing interest rates is around 6.5%. The increase in unemployment moves the Fed further away from the interest rate hike in principle, but they could act without regard to the numbers. The Fed has stated however that they were relying on data rather than a specific date to implement the ending of QE, so that has to be taken into consideration.
US Change in non-farm payrolls showed an added 195K jobs instead of the expected 165K, prompting investors to think that the Fed will maintain its path on QE tapering beginning sooner than later. The addition of workers into the workforce has Ted Wieserman of Morgan Stanley thinking that the unemployment levels quoted as a target for the rate hikes by the Fed could be hit in March of 2015.
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