Today the U.S. Manufacturing ISM report came out; according to the recent update, the U.S. Manufacturing PMI index fell to 49.7% during June 2012. The U.S. Manufacturing PMI is an index that estimates the economic progress of the U.S. manufacturing sector; the index fell for the first time since July 2009 after the index had expanded for the past 36th consecutive months; the growth rate fell from 53.5% in May to 49.7% in June i.e. a 3.8 percent point drop. This means that the U.S. manufacturing sector is contracting in June compared to May.
Among the factors that were examined in this survey: one of the sharpest contractions was in new orders: from 60.1% to 47.8% – a decrease of 12.3 percent point; production also fell by 4.6 percent points; on the other hand, among the sectors that grew were employment and imports.
According to Roache et. al (2008) it was concluded that the PMI Manufacturing ISM report tends to be negatively correlated with the daily changes of gold and silver prices without controlling to the U.S dollar effect. Furthermore, the PMI news suppose to have a positive lagged correlation with natural gas prices, i.e. all things being equal including the U.S dollar, as the PMI Manufacturing ISM index tends to fall, natural gas prices also decrease.
This news may have been among the factors to pull down energy commodities prices including natural gas prices and crude oil (WTI) during the day.
Current gold price, (August 2012 delivery) is traded at $ 1,597.6 per t oz. a $6.6 decrease or 0.41%, as of 21:50*.
Current Nymex crude oil price, (August 2012 delivery) is traded down by 1.6%, at $83.6 per barrel as of 21:50*.
Euros to USD is currently traded at 1.2576 as of 21:50*.
(* GMT)
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