2 Dec 2015
PMI/ISM’s contracts simultaneously for the world’s two biggest economies – Deutsche Bank
FXStreet (Delhi) – Craig Nicol, Research Analyst at Deutsche Bank, notes that the two largest economies in the world saw their PMI/ISM’s 'contract' simultaneously for the first time since February 2009.
Key Quotes
“Clearly this is only manufacturing and not services but the US ISM (48.6 vs. 50.5 expected) dipped below 50 for the first time since November 2012 following China's PMI release (49.6 vs. 49.8 expected) that we discussed yesterday morning.”
“With services accounting for around 85% of the US economy the common perception yesterday was that the disappointing number wouldn't have much impact on the Fed's drive to hike in two weeks’ time (the probability of which is little moved at 72% this morning). This is probably fair but it's another reflection of the unique times we live in that there is such a large gap between services and manufacturing PMIs. In the US they have never diverged as much. We’ll get the latest reads on Thursday and if analyst expectations are correct then this theme will continue.”
Key Quotes
“Clearly this is only manufacturing and not services but the US ISM (48.6 vs. 50.5 expected) dipped below 50 for the first time since November 2012 following China's PMI release (49.6 vs. 49.8 expected) that we discussed yesterday morning.”
“With services accounting for around 85% of the US economy the common perception yesterday was that the disappointing number wouldn't have much impact on the Fed's drive to hike in two weeks’ time (the probability of which is little moved at 72% this morning). This is probably fair but it's another reflection of the unique times we live in that there is such a large gap between services and manufacturing PMIs. In the US they have never diverged as much. We’ll get the latest reads on Thursday and if analyst expectations are correct then this theme will continue.”