Today the U.S. Manufacturing ISM report was published and the U.S. Manufacturing PMI reached 51.6% during September. The U.S. Manufacturing PMI, which is an index that shows the economic activity in the U.S. manufacturing sector, grew for the 26th consecutive month; the growth rate inclined from 50.6% in August to 51.6% in September i.e. a one percent points incline. This means that not only the U.S. manufacturing sector is growing but also, it grows at a faster pace in September compared to August.
Among the factors that were examined in this survey: the sharpest increase was in exports from 50.5% to 53.5% – an increase of 3.0 percent point; production also rose by 2.6 percent points; on the other hand, among the factors that contracted were backlog of orders – a drop of 4.5 percent point and inventories – a decrease of 0.3 percent point.
According to Roache et. al (2008) it was suggested that the PMI Manufacturing ISM report has a negative correlation with gold and silver prices, when not controlling for the US dollar effect. Currently, it seems that this news doesn’t have much of an effect on gold and silver prices as they are traded up because the concerns of the Greek debt crisis and the anxiety in the markets crowding out the effect of the PMI survey news. Further more, this news has a positive lagged effect on natural gas prices, i.e. all things being equal and when controlling for the US dollar effect, as the PMI Manufacturing ISM index rises so does natural gas price.
The major U.S. stock market indexes are currently traded down including DOW, S&P500, NASDAQ.
Current gold price, short term futures (November 2011 delivery) is traded at $ 1,655 per t oz. a $33 increase or 2.03%, as of 18:47*.
Current Nymex crude oil price, short term futures (November 2011 delivery) is traded down by 1.61%, at $77.59 per barrel as of 18:51*.
Euros to USD is currently traded down at 1.3244 a 1.0680% decrease as of 18:57*.
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