The Science Of Economics-More U.S. Data Metrics!
Shain Vernier • 3 min read
The start to the U.S. session has been active on the economic news front. It seems that the tendency for humans is to measure, scrutinize and quantify everything around us. In many ways that is a positive attribute. But, often the intervention of academics and statisticians have profound market implications.
How Do We Trade Science?
Whether or not these metrics truly mean anything is debatable. They are used to form public opinion and craft policy. As traders, all we need to know is that they can drive markets. Depending upon our position, that can be either good or bad.
Here is the world of academia's latest batch of raw data facing the U.S. economy:
Event Previous Projected Actual
Markit Manufacturing PMI (Aug) 52.5 52.5 52.8
Construction Spending (MoM, Aug) -1.4% 0.5% -0.6%
ISM Manufacturing PMI (Aug) 56.3 56.5 58.8
ISM Prices Paid (Aug) 62 62 62
University of Michigan Consumer Sentiment (Aug) 97.6 97.4 96.8
The market mover of this group is the ISM Manufacturing PMI, which came in above expectations. It has been a theme lately, but Construction Spending for August was down yet again.
All of the metrics show a contracting U.S. real estate/construction industry. This trend is a biggie going into the FOMC meeting later this month. The expected tightening of monetary policy will weaken this industry even more. While a FED rate hike later this month will strengthen the USD, it will hurt U.S. equities.
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