It's manufacturing day in the US. Can the ISM continue to show a bounce?
The US ISM manufacturing PMI has posted three straight months of gains following the drop to 51.5 earlier in the year
Those three gains point to an upward trend developing which is good news for the US economy
That trend could be further confirmed today with the latest numbers out at 14.00 GMT, though the market is not expecting any improvement. 53.5 is expected, which is unchanged on June
ISM manufacturing
The Empire State manufacturing gave us a clue that manufacturing could be positive in July when it bounced to 3.86 from -1.98, and so far the rest have lived up to expectations in the main numbers. Only the Philly Fed has let the side down so far (aside from some of the minor regional numbers). Markit manufacturing also rose for the second month on the spin and we get the final read 15 minutes before the ISM. We're expecting 53.8, unchanged from the flash and confirmation of the rise from June's 53.6
So expectations are muted for today's ISM number which increases the risk of a decent pop if we beat that it. If we crack 54.0 or more then that's going to be music to dollar bulls ears and rate expectations. The underlying components will be important too but the headline will set the market on its way. If we come in lower there will be worries that this is just a dead cat bounce in manufacturing, though we'll need to see a sizeable miss of sub 53.0 to get a decent drop in the buck
As we saw with the employment cost data last week the market is ready to make a big move on data so even a minor variation from expectations could give us a decent range