In view of James Knightley, chief international economist at ING, intensifying trade war fears and an inventory overhang are weighing on the US manufacturing sector as depicted by the recent data releases.

Key Quotes

“The latest set of regional manufacturing surveys have been dire. The NY Empire survey saw a record fall, the Dallas Fed manufacturing survey is at a three-year low, the Philadelphia Fed survey is a relative outperformer at only a four-month low while Richmond survey managed to modestly beat market expectations, though still fell. Taking these altogether they point to a sizeable drop in the national ISM measure, which is already at its lowest level since October 2016. There is the very real prospect it dips below the break-even 50 level on Monday.”

“The ISM manufacturing index has historically been one of the best lead indicators for US GDP growth, although its predictive power has seemingly become less strong in recent years, reflecting the diminishing importance of the sector in terms of total economic output. Nonetheless, a sub-50 ISM will heighten concerns within the Federal Reserve that the economy is softening and with little prospect that trade tensions will ease in the near term, there is a growing probability the Federal Reserve will choose to act pre-emptively to try and support the economy through lowering interest rates.”

“Should trade talks go badly over the weekend, the ISM breaks below 50 and next Friday’s jobs report offers further evidence of a slowdown in hiring we will seriously have to consider putting in an additional July rate cut into our forecast.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD trims Williams-related gains, nears 1.1200 figure

The shared currency retreated sharply vs. its American rival after testing the 1.1280 price zone, as Fed’s representative rushed to counter Williams’ dovish words. EUR/USD at daily lows ahead of Michigan Consumer Confidence Index.

EUR/USD News

GBP/USD trading marginally lower daily basis but above 1.2500

The Pound gave back some of its Thursday’s gain on dollar’s relief. The GBP/USD pair broke a daily descendant trend line coming from June’s high and holds above it, leaving little room for sellers to act.

GBP/USD News

USD/JPY: bears pausing, still in control

Japanese National Inflation steady at 0.7%YoY in June. US Michigan Consumer Sentiment Index expected at 98.5 in July. USD/JPY corrective advance falling short of signaling an interim bottom in place.

USD/JPY News

Gold consolidates around $ 1440, eyes US data for fresh direction

Gold (futures on Comex) extends its side-trend around the 1440 mark into the mid-European session, having stalled its retreat from 2019 highs of 1454 near 1437 region.

Gold News

Michigan Consumer Sentiment survey preview: The pool of happiness spreads

The University of Michigan will issue its preliminary Survey of Consumers for July on Friday July 18th at 12:30 pm GMT. Consumer sentiment expected to gain modestly in July. Optimism should be supported by strong June jobs report.

Read more

MAJORS

Cryptocurrencies

Signatures


  •  
  •  
  •  
  •  
  •