During Monday the Chicago Business Barometer went down 7.5 points, hitting a low of 48.7. The massive fall was caused by the decline is new orders, which reached their lowest point since March. The Barometer’s reading for October was at 56.2. New orders shortage has also caused the Chicago PMI (Purchasing Managers Index) to fall the sixth time this year.
On Tuesday China’ National Bureau of Statistics released the new figures for the manufacturing PMI, which continued its downward path reaching 49.6 in November against October’s 49.8, negatively surprising investors which expected a 49.9 hit. The latest release over China’s manufacturing sector shows an improvement in the manufacturing sector, although numbers remain on the contraction course the ninth consecutive month. The Caixin PMI went up to 48.6 in November, previously 48.3.
The US ISM’s Index (Institute for Supply Management) dropped to 48.6 in November, the lowest reading since June, 2009, from October’s 50.1. The report puts the manufacturing sector in recession, a set of data just ahead of the much anticipated Fed rate hike.
The Australian Dollar had a top performance throughout the month of November, rising 2% against its major competitor – the US dollar – on Tuesday after the poor data release from the US side, although the iron ore prices are sinking ever further reaching multi-years lows. The AUD/USD is lingering in the 0.73 area, recovering from previous 0.7170 posted in late November. The ISM impact was easily spotted in the evolution, the trend hiking to 0.7320.
However, the impact is not as big as expected due to the job details released in the US manufacturing sector, which came at 51.3 versus an expected 48.4 and previous 47.6 in employment.
As expected, the RBA (Reserve Bank of Australia) hasn’t made any changes in the rate policy, in spite of the weak data in last week’s CAPEX report. RBA’s governor Stevens didn’t even present any concerns regarding an approaching rate cut. The next important news is the Q3 GDP (Gross Domestic Product), the markets expecting a 0.8% rise after a +0.2% reading in October.
Gold reached near the $1,075/ounce handle yesterday, but quickly retraced back to $1,062 an ounce to settle the day with an overall 0.1% loss in the $1,064 per ounce area. The yellow metal prices are under pressure since the beginning of the month to Fed rate hike prospects, the figures going down more than 10% since the middle of October to a staggering five year and a half low last week at $1,052 per ounce.
