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    ISM manufacturing expands for 3rd month

    Hitting a 2-month high and expanding for a 3rd consecutive month, today's ISM read provided a further boost of confidence for the US economy in the months ahead. 

    View related analysis:
    Global PMI analysis

    Expanding at a 2-month high of 51.3, it is not yet the rip-roaring expansion we'd like to see to feel more confident of stocks breaking to new highs with force. However, after reaching a low of 48 for December (which formed part of a 4-month contraction), it is enough to fend off a lot of the bearish views which were formed during the turbulence of Q1 this year. 

    The employment and inventories sub-indices continued to weigh on the headline figure but the tick higher today does raise hope of a brighter economy for the US in a world of lower growth and inflationary expectations. Having now expanded for 3 consecutive months we keenly await to see if the highly watched indicator picks up pace from here on, to suggest stronger GDP growth in Q3 or Q4. 

    Within the report respondents to the monthly survey highlighted continued strength in the food, beverage and chemical sectors. Transportation noted a 'good, but slowing' business whilst computer and electronic products blamed the China slowdown behind the cause of low orders. 

    Still to come this week from a packed FX calendar is:
    - AUD trade balance
    - EUR interest rate decision and press conference
    - GBP Carney speaking
    - AUD manufacturing PMI
    - EUR Markit PMI and retail sales
    - USD non-farm payroll and ISM non-manufacturing 

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