The recovery was broad-based, with some impressive gains that still left indices for the most part worse than they were in July. The new orders index bounced up 6.0 to 55.1, a decent reading that could lead the sector back into modest to moderate growth in the fourth quarter, while the production index rose 3.2 to 52.8. Employment and inventories readings were nearly neutral, the former up 1.5 and the latter up 0.5, both to 49.5. That put our final demand measure (new orders minus inventories) up to +5.6 from +0.1, which was the lowest since October 2012.
The EUR/USD fell after better-than-expected US data, but in our opinion the ISM reading does not change a lot in Fed interest rate expectations. We forecast a hike in December.
Today’s EUR/USD drop was stopped by the and in our opinion current level is a good opportunity to get long.
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