Worse than expected manufacturing data in the US, in line with many other countries around the world. The ISM manufacturing PMI fell to 51.1 points. The unemployment component is down from 52.7 to 51.2 points.
The USD is down, with a probable tick lower in rate hike expectations.
New orders fell to 51.7 points, the lowest in over two years. Export orders are even worse with the lowest since 2009. However, it is important to note that the services sector is much larger than the manufacturing one in the US.
The IBD/TIPP Economic Optimism fell to 42, worse than 47.3 predicted.
The purchasing managers’ index for the manufacturing sector by ISM was expected to stand at 52.6 points, very similar to 52.7 seen in July. This is a top tier indicator and a hint towards Friday’s Non-Farm Payrolls, which in turn is a key towards the Fed decision later this month.
The dollar was stronger against many currencies towards the publication.
- EUR/USD traded around 1.1250 ahead of the all important ECB decision. The pair now trades at 1.1280.
- GBP/USD traded around 1.5330. Cable is marginally higher as it received its own weak data.
- USD/JPY was flirting with the very round number of 120 and now below this level.
- USD/CAD was around 1.3140 after the good Canadian GDP. The pair is now around 1.3140.
- AUD/USD was around 0.7044, not encouraged by the RBA’s no-change. AUD/USD fails to recover and trades around 0.7030.
- NZD/USD sticks around is around 0.6330.
Earlier, Markit’s final manufacturing PMI for August showed 53 points, a tick above the initial read of 52.9 points. The 50 point mark separates growth from contraction.
More: Will the Fed make good on their plans for a September rate hike?
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