USD Surge Stops After Empire State Manufacturing Dives to -43.7 Points
Today it was a one-way traffic in the markets during the European session, with the USD surging higher against the rest of the main currency bloc. The reversal in the Treasury yields following the bank holiday weekend has resulted in higher yields, which were helping to keep the USD in demand during most of the day.
However, the USD climb has stopped now, after the release of the Empire State Fed Manufacturing Index, which plummeted to -43.7 points in January, from -14.5 in December. It’s the first manufacturing release of the year, and at first glance, it shows a dramatic drop in activity. New orders fell to -49.4 points from -11.3 points previously. However, we’re mostly long on the USD and will look to buy it against Gold soon probably.
US Empire State Manufacturing Index for January 2024
Current Conditions:
- Empire manufacturing index for January is reported at -43.7 points, significantly below the estimated -5.0 points.
- The previous month’s index was -14.5 points, and the expectation last month was for a gain of 2.0 points, suggesting a larger-than-expected decline.
Details – Current Conditions:
- New orders are at -49.4 points, compared to -11.3 points last month.
- Shipments are at -31.3 points, compared to -6.4 points last month.
- Prices paid are at 13.2 points, down from 16.7 points last month.
- Prices received are at 9.5 points, down from +11.5 points last month.
- Employment is at -6.9, an improvement from -8.4 last month.
- Average employee workweek is at -6.1, compared to -2.4 last month.
- Unfilled orders are at -24.2, slightly worse than -24.0 last month.
- Delivery times are at -8.4, an improvement from -15.6 last month.
- Inventories are at -7.4, compared to -5.2 last month.
6-Month Forward Index:
- General business condition for the next six months is at 18.8, compared to 12.1 last month.
- New orders for the next six months are at 25.2, compared to 11.3 last month.
- Shipments for the next six months are at 24.6, compared to 15.8 last month.
- Prices paid for the next six months are at 40.0, compared to 25.0 last month.
- Prices received for the next six months are at 32.6, compared to 27.1 last month.
- Employment for the next six months is at 16.8, compared to 10.9 last month.
- Average employee workweek for the next six months is at 14.7, compared to 10.4 last month.
- Unfilled orders for the next six months are at 16.8, compared to 5.2 last month.
- Delivery times for the next six months are at 11.6, compared to -1.1 last month.
- Inventories for the next six months are at 5.3, compared to 9.4 last month.
- Capital expenditures for the next six months are at 13.7, compared to 4.2 last month.
- Technology spending for the next six months is at 9.5, compared to 10.3 last month.
The USD dipped lower after the data, but other manufacturing reports haven’t shown a sudden slowdown in production. So this survey seems a bit out of place, hence the market seems skeptical of such numbers. However, this is the first manufacturing index of 2024, so the focus will be on the upcoming reports, but for the time being, the market is doubtful of the news.
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