ISM Manufacturing Talking Points:
- The US Dollar[1] dropped along with Treasury yields as the ISM survey shows the US Manufacturing sector is now contracting for the second consecutive month
- Trade war issues remain a prime factor for the contraction seen in the manufacturing sector
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The Institute for Supply Management released their report on the manufacturing sector Tuesday morning, revealing the second consecutive month that US manufacturing has contracted with a reading of 47.8, the lowest level since 2009. The print put the brakes on a rally in the US Dollar, which started out Q4 with a two-year high. The DXY index dropped from 99.67 to 99.38 as the report crossed the wires. The implications of the report were felt broadly across markets with US Treasury yields also dropping sharply as the 10-Year yield fell under 1.650%, while Gold[9] pushed above $1476. [8]
US Dollar Index (DXY) with Gold (XAUUSD): 5 – Minute Time Frame (October 1)
US-China trade issues remain a prime driver behind the contraction with the report’s issuer Timothy Fiore stating “global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July
