Summary:

• ISM non-manufacturing PMI; 58.8 vs 59.0 exp and 59.5 prior
• Factory orders M/M: 1.2% vs 1.7% exp and -1.4% prior 
• Gold moving near key long term resistance

Following  a strong ADP print earlier this afternoon, the next batch of US data has been a little disappointing with both the ISM and the latest factory data missing forecasts. The ISM non-manufacturing PMI fell more than expected in coming in at 58.8 from 59.5 last time out against consensus forecasts for a 59.0 print. Whilst this miss is minimal in size it does end a sequence of above expected readings for this indicator and follows its manufacturing equivalent in pulling back from historic highs.     

 

Today’s ISM reading has dropped lower and follows the lead of the manufacturing PMI in pulling back from recent highs. Source: xStation 

At the same time as the ISM release the most recent factory orders numbers came in also below forecast. The reading of 1.2% M/M represents a bounce back into positive territory after last time’s -1.4% print, but is below the 1.7% expected. This is the second month in a row that factory orders have missed and could be seen as an early warning sign that this sector is performing worse than expected. 

 Gold continues to run up against a ceiling around 1355-1375 that has proved stubborn resistance in recent years. Source: xStation 

Gold has moved higher today, largely thanks to the escalating trade wars between the US and China. The market has been in an uncharacteristically narrow range this year with the price looking to move higher but finding resistance around the 1355-1375 region. A clean break through here would pave the way for a sustained move to the upside but unless that happens the resistance remains in place.