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Data released today showed the ISM manufacturing index dropped from 51.7 to 51.2. According to Kjetil Olsen, Chief Economist at Nordea Markets, the numbers from today’s ISM report will not persuade the Federal Reserve to think different about monetary policy going forward.  

Key Quotes:  

“The drop was almost in full explained by a drop in both the production index and the employment index. The more forward-looking new orders index was actually slightly up, and the new orders minus inventories series give hopes for a stabilisation in the near term.”

“Global weakness and uncertainty around trade was an important reason for Feds rate cut yesterday. In sum therefore, todays numbers will not persuade the FOMC to think different about monetary policy gong forward.”