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US Factory Orders Slightly Lower

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US Factory Orders Slightly Lower

The US Census Bureau has just released details of the April Factory Orders data. The headline reading is showing a month on month increase of 0.7%, this is slightly lower than the 1.1% experienced in March but up on the 0.5% market consensus expectation.

Also released in the past hour are details of the Institute of Supply Management’s (ISM) New York Index. This holistic measure of business conditions in the NY area is showing a good pick up in sentiment from 50.6 last month to 55.3 this month.

These are relatively minor data releases early in a week that will finish up with the two key employment metrics for the US. Friday will update both the US unemployment rate and provide the latest reading on the all important Non Farm Payrolls. As of now neither reading is anticipated to either surprise nor impress.

Between now and the end of the week there are however a couple of themes to keep a close eye on. Firstly, US equity markets are continuing to set record highs, these have been buoyed further by the Feds Charles Evens hinting towards an extension of the monetary tightening time line and also by an unexpected pick up in China’s manufacturing data.

The second theme with the potential to impact not just US but global markets this week is President Obama’s visit to Europe. Already he has announced $1Bn fund to bolster Polish defense capabilities in the face of rising tensions in the Ukraine. In the scheme of national and defense budgets this is a very moderate sum and is unlikely to substantially augment any countries defense abilities. It is however designed to be a very public show of support to Europe by the US in the face of Russia’s continued activity in the Ukraine. This move alone will not temper Russian President Putin’s activities in the region as is most likely going to contribute to a heightening of geopolitical tensions ahead of any end game abatement.

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