US May data in market´s focus

The US data had something for everyone. Even though personal income recorded a surprisingly strong rise, spending stagnated and the PCE deflator disappointed. The core rate eased to 1.2% and is thus moving further away from the Fed's 2% target, notes Commerzbank. However, none of that mattered in the end. The improved ISM index for the manufacturing sector saved the day. As a result EUR-USD eased by about one cent. 

The ISM index provides the first insight into the month of May while the other data simply complements the image of April. Even though some of the data for April disappointed the ISM index gives signals that the following month was improving. And of course that will be decisive for the FOMC, as its plan for a normalization of US monetary policy is based on the US economy returning to a growth path following a weak first quarter.