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Chicago Purchasing Manager Index Collapses!

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it's a manufacturing business activity index for the Midwestern region - an important barometer used by the Fed in it's rate policy.

a reading below 50 indicates a contraction. more shocking is the DROP from last month.

the number can be subject to spurious elements and markets will look to the NATIONAL reading due out tomorrow for confirmation. 57 is expected.

Edited by spoon

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Forex - Dollar weakened by GDP update, but oil-price ease helps

CHICAGO (AFX) - The dollar remained fractionally lower against its chief counterparts Wednesday morning after the U.S. government revised down its latest measure of economic growth.

The dollar was supported, however, by an ease for crude-oil prices after a U.S. official said reserve supplies would be tapped to temporarily ease record-high prices, expected to remain elevated after Hurricane Katrina shut down the nation's major refinery region.

At last check, the dollar was unchanged against the euro, with the euro fetching $1.2214.

The greenback fell 0.1% to 111.51 yen.

The U.S. currency slipped 0.1% against its British counterpart, to $1.7872.

U.S. economic growth in the second quarter was revised slightly lower to a 3.3% annualized rate from 3.4% previously, the Commerce Department said.

The U.S. economy slowed slightly from the 3.8% growth in the first quarter. The economy has grown 3.6% in the past year.

The quarterly revision was due to an upward revision in imports and a downward revision to consumer spending, offset by an upward revision to inventory investment.

But moderating growth isn't about to sideline the Fed just yet, at least according to members' views presented in Tuesday's release of meeting minutes from the Aug. 9 policy meeting.

The dollar made back some ground late Tuesday following the release of those generally hawkish minutes. The Fed's comments were taken as a signal of at least two more interest-rate hikes for this year.

Energy Secretary Samuel Bodman said in an interview with cable channel CNBC that details of the decision, which comes after the devastation wrought by Hurricane Katrina in the Gulf Coast, would come later in the day.

October-dated crude, which had held steady above $70 a barrel overnight, eased back to below $69 a barrel immediately after the news.

This story was supplied by MarketWatch. For further information see www.marketwatch.com.

From AOL money but non members should use the link at the bottom of the quote.

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This is fairly important.

The national number (not out yet) has, during the entire greenspan era, never been below 50 at the time of a fed funds rate cut.

Thus if the national number (ISM) is below 50 it increases the probability that we have seen the last rate cut.

From the point of view of GOLD investors shares usually turn up after the last rate increase and before the first rate cut. Thus the PMI number is an early indication that we may be at that point.

GOLD follows the shares usually so there may be a few more weeks/months of mild downside.

As for the housing boom. Its over, done, finished, stick a fork in it.

On the other hand if the fed continue to raise rates with the ISM <50 then we are in new uncharted territory. The housing bust could be historic.

BAB

Edited by BayAreaBear

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Guest prudence

This is fairly important.

The national number (not out yet) has, during the entire greenspan era, never been below 50 at the time of a fed funds rate cut.

Thus if the national number (ISM) is below 50 it increases the probability that we have seen the last rate cut.

Surely an ISM fall indicates a slowing economy. Just because IRs were lower when the ISM was higher does not mean that the opposite will happen now. A fall in the ISM number indicates a weakening economy. That usually leads to lower not higher IRs............

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Spoon

Should I buy my holiday bucks tomorrow morning or wait until after the announcement of the national figure? Thanks for any advice.

If you don't bill me I won't sue you!! :D

I like that , consider it stolen :)

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Spoon

Should I buy my holiday bucks tomorrow morning or wait until after the announcement of the national figure? Thanks for any advice.

If you don't bill me I won't sue you!!  :D

i would wait till after the national ISM release due out 15.00 tomorrow.

mind you i'm not sure fx bureaus adjust their rates to intra-day market moves in which case wait till friday.

Edited by spoon

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This is fairly important.

The national number (not out yet) has, during the entire greenspan era, never been below 50 at the time of a fed funds rate cut.

Thus if the national number (ISM) is below 50 it increases the probability that we have seen the last rate cut.

Surely an ISM fall indicates a slowing economy. Just because IRs were lower when the ISM was higher does not mean that the opposite will happen now. A fall in the ISM number indicates a weakening economy. That usually leads to lower not higher IRs............

Exactly

If the ISM number does what the Chicago has just done it increases the chances that the fed switch from tightening to easing will occur sooner rather than later. So we end up with a slowing economy, inflation out of control, and the fed in easing mode.

For a gold investor thats like hitting the mother lode.

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If the ISM number does what the Chicago has just done it increases the chances that the fed switch from tightening to easing will occur sooner rather than later.  So we end up with a slowing economy,  inflation  out of control, and the fed in easing mode.

For a gold investor thats like hitting the mother lode.

And in addition:

The Central Bank Gold Agreement Signatories have agreed to stop selling until the 26th September!

http://www.321gold.com/editorials/phillips...lips082305.html

Gold production in South Africa could decline by up to 20% this year

http://www.321gold.com/editorials/phillips...lips082905.html

Which makes it more like the grandmother lode!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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