Dow Jones futures off lows ahead of expected ISM improvement

As the European market session has unfolded, the US equity futures have now all recovered some of their earlier downside. Earlier the Dow Jones was pricing a reopening as low as 38,525. That is not the case any more. The index is currently priced to reopen around 38,590. That is still underneath where the index closed on Friday, at 38,654, but in better shape that it was a couple of hours ago. So, the big data release this afternoon- at 3pm GMT could help shape the price action for the index later on. That said, it looks like it might react positively either way, depending on how those US yields fare. The fact that all the US markets ignored the push higher in yields on Friday was a testament to their resilience, but it remains to be seen if the same will play out today. So, that service sector ISM index is expected to improve to around 52 in January, from 50.6 in December. Once again we should watch the prices paid component, last at 56.7 (revised lower) and the New orders, last at 52.8. If that data replicates what we saw last week in the manufacturing report, then it will probably fuel an even more optimistic outlook for the economy going forward.