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 advances 1.10 amid upbeat trade headlines, after mixed US retail sales

EUR/USD is trading closer to 1.1050, up on the day. US Commerce Secretary Ross has expressed optimism about reaching a deal with China. The Retail Sales Control Group met expectations with 0.3%.

EUR/USD News

GBP/USD soars past 1.2900 as Farage gives additional boost to Conservatives

GBP/USD has leaped above 1.29, the highest since early November, as the Brexit Party has failed to field candidates in 43 additional seats, facilitating a victory for PM Boris Johnson.

GBP/USD News

USD/JPY clings to gains near session tops, around 108.70 post-US data

The USD/JPY pair maintained its strong bid tone near session tops and had a rather muted reaction to the mixed US economic data.

USD/JPY News

Gold looks to close week with small gains below $1,470

The precious metal struggled to find demand on Friday as the upbeat market mood on renewed hopes of the United States and China reaching a trade deal to avoid a tariff hike in December caused investors to move away from safe havens.

Gold News

Crypto Today: Playing with the thin red line

BTC/USD has fallen below $8,500 during the Asian trading session. A close below this support level would put $7,500 on the trading table. ETH/USD is moving below the 50-period exponential moving average.

Read more

Forex MAJORS

Cryptocurrencies

Signatures