Yesterday was light on the data side we had data realises from Germany and Canada. The euro traded higher yesterday. The Canadian dollar stayed strong and the GBP bounced of the key support level.
Manufacturing orders in Germany were weaker than expected in August. A 1.8 percent monthly fall followed a steeper revised 2.2 percent drop in July and constituted the first back-to-back decline since January/February. However, with orders down 5.3 percent from a year ago, annual growth still rebounded sharply to stand at 2.2 percentage
The monthly decrease was led by capital goods which were down fully 2.8 percent. However, weakness was broad-based as consumer and durable goods dropped 1.5 percent and basics were off 0.4 percent.
In the US a surge in imports of the new iPhones helped feed what was an unusually wide trade gap in August of $48.3 billion, up from July’s revised $41.8 billion.. Exports were down nearly across the board including industrial supplies at minus $2.2 billion, consumer goods at minus $0.6 million, autos at minus $0.5 million, and foods/feeds/beverages at minus $0.3 million. Weakness in exports reflects weakness in foreign demand together with the strength of the dollar.
The unadjusted Ivey PMI rose 7.7 points to 63.3 in September, its highest reading since May. However, this is due to seasonal factors last month and adjusted for these the headline index fell 4.3 points to 53.7. This is still above the 50 growth threshold but also indicative of a clear deceleration in activity rates from August
Within the adjusted results the employment index edged 0.8 points higher to 57.1. This should point to a decent employment gain in Friday’s labour market report. Delivery times were slightly slower than in August (49.8 after 48.2) while inventory unwinding was replaced by fresh accumulation (52.1 after 42.4). Finally prices (64.4 after 66.3) rose at a slightly slower rate than in mid-quarter.