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Economic Data Worsens

Economic Data Worsens

Recent PMI publications from far and wide have proven suggestions made from a variety of financial spheres that not all is good with the global economy. Stagnation The term stagnation The term stagnation The term stagnation in economics means a period of time in which an economy is achieving little grow... More in economics means a period of time in which an economy is achieving little grow... More in economics means a period of time in which an economy is achieving little grow... More continues to be a thorn in the side of the major economies. This has been proven via last week’s Chicago PMI and yesterday’s ISM Manufacturing PMI reports from the States, the Caixin Manufacturing PMI from China early on Tuesday, and the just released U.K. Manufacturing PMI. Every single publication just listed has come in negative and has produced essentially what many might call recessionary data or at the very least worsening economic activity.

Commodities have done well recently and this may have a lot to do with the weakness in the USD The USD The USD is the official currency of the United States of America. It is the largest reserve currency... More is the official currency of the United States of America. It is the largest reserve currency... More the past two weeks. However, at some points questions concerning demand will become legitimate again and investors and traders will take notice of weakened global economic data via the recent splurge of poor manufacturing outcomes internationally.  Divergence has certainly been noted by investors and the question is when they will act upon these readings.

The dynamic of the FX markets has largely been USD centric because of the tough talk that came from the Fed The Federal Reserve The Federal Reserve is the Central Bank of the United States of America and sets the monetary policy When used by traders and investors monetary policy When used by traders and investors monetary policy When used by traders and investors monetary policy usually refers to Central Bank policy concerning ... More usually refers to Central Bank policy concerning ... More usually refers to Central Bank policy concerning ... More ... More is the Central Bank of the United States of America and sets the monetary policy... More the past year, but the past couple of months have seen the Fed The Federal Reserve is the Central Bank of the United States of America and sets the monetary policy... More have to take a couple of steps backwards and acknowledge that there is slowing economic activity even in the United States.

Traders have the unique potential to make money on data results that are negative. The U.S. data the past week has continued to support When investors and traders use the term support When investors and traders use the term support When investors and traders use the term support, or support level, they are often speaking about a p... More , or support level, they are often speaking about a p... More , or support level, they are often speaking about a p... More the notion that the Fed will not be able to raise interest rates in June. It would take some very positive employment numbers this coming Friday from the Non-Farm Employment Change figures and then a combination of better GDP results and improved Consumer Sentiment in the coming weeks and month to make a case for the potential of a hike from the Fed. And like most things in life, good data from the global economic quarters are not guaranteed.

There are also three potential political events that could really throw a wrench into the economic landscape in the coming months, one – the Brexit vote, two – a potential new round of chaos from Greece regarding its debt and how it is managed by the European Union and IMF, three – the November election for POTUS (President of the United States).

While many might not find the Factory Orders numbers figures coming from the U.S. tomorrow – Wednesday, very exciting they might provide another glance into the looking glass for investors. Yes, the ADP numbers will be released tomorrow and they are of interest, but manufacturing, inventories, and factory statistics are important and financial institutions are likely paying attention. The USD has lost plenty of ground to the GBP The GBP The GBP is the official currency of the United Kingdom. The GBP is a major currency and currently ra... More is the official currency of the United Kingdom. The GBP is a major currency and currently ra... More and EUR The EUR The EUR is the official currency of the European Union. Presently 19 out of the 28 collective  nati... More is the official currency of the European Union. Presently 19 out of the 28 collective  nati... More in recent trading, but the value of the Greenback The USD is the official currency of the United States of America. It is the largest reserve currency... More is certainly not in mortal danger and keep in mind the Federal Reserve The Federal Reserve The Federal Reserve is the Central Bank of the United States of America and sets the monetary policy... More is the Central Bank of the United States of America and sets the monetary policy... More might be happy if the Greenback were to lose a bit more value in order to help American exports.