Summary:

• US industrial production m/m rise 0.9% vs 0.5% exp
• Capacity utilization beats forecasts for only the 2nd time in 2017
•  US500 hits daily high after Wall Street open

Following the earlier disappointment in the weekly initial jobless claims figures, there has been some positive data from the US with industrial production and the capacity utilization rate both beating forecasts. 

Industrial production M/M increased by 0.9% vs 0.5% expected and the prior reading also experienced a small upwards revision to 0.4% from 0.3% previously. The longer term picture for US industrial production continues to improve with the Y/Y reading rising to its highest level in several years. 

 Industrial production has risen higher once more and the uptrend seen since the end of 2015 remains firmly intact. Source: XTB Macrobond

At the same time as the aforementioned release the capacity utilization rate was also announced. This rose to 77.0% – the highest level since the February 2016 release – against a consensus expectation for 76.3% and a prior reading of 76.4%.

The prior reading was also revised higher from 76.0% previously. Capacity utilization had been something of a disappointment in the US lately with 8 of the past 14 readings missing forecasts including the last 2. Today’s better than expected release is only the second time this year there has been a positive surprise and could well see a pick up in inflation going forward. 

The market reaction to the releases has been fairly muted with the USD actually dipping a little lower since they were announced. Gold remains near its highest levels of the day around 1280 and a technical overview of the precious metal can be found here.

 The US500 has broken above a falling trendline in the last hour. Is the sell-off now over? 2572 possible support. Source: xStation 

Since the release, the cash session for US stocks has begun with some buying seen in the US500 shortly after the Wall Street open. The market has moved up to its highest level of the day at 2577 and also broken above a falling trendline from the double top seen at the all-time high of 2596. Price has also recaptured the 2572 level which may now be seen as support.