Important US Fed data is released and markets react

Friday, December 01, 2023 - 15:38
Point Trader Group

Data on the Manufacturing Purchasing Managers' Index issued by the Institute for Supply Management (ISM) have now been released, contrary to market expectations. This indicator is considered important in interest expectations for the coming period, as it gives an overview of the performance of the economy in general and whether it is heading towards a recession or not.

The data was negative this time, indicating that the economy is heading into a soft recession, which the Fed wants, considering that this contributes to reducing inflation while maintaining economic growth, and thus these data motivate the Fed to end its tight monetary policy.

Immediately after the data was released, the dollar lost all of its relative gains on the one hand, while gold consolidated its gains on the other hand.

The Institute for Supply Management (ISM) Manufacturing Purchasing Managers' Index for November recorded 46.7 points, compared to expectations of 47.6 points, and the previous reading was 46.7 points.

While the industrial purchasing managers index for November recorded 49.4 points, according to expectations, while the previous reading recorded 47.9 points.

The ISM index for the industrial sector determines the level of activity of purchasing managers in the industrial sector. A reading above 50 indicates expansion, and vice versa if it comes below 50 points.

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