US ISM Manufacturing PMI 09/01/09

10:00am (NY Time) US ISM Manufacturing PMI   Forecast 50.6   Previous 48.9
ACTION: USD/JPY                                    BUY 53.0             SELL 48.0

The ISM PMI releases are highly regarded by traders and investors alike since they have been proven throughout the years to be extremely accurate and as a first look and leading indicator over the Manufacturing sector in the economy, this will be the first release in over a year to be over the medium 50 figure.

As the 50 figure is considered to be the medium point, any number above the 50 is considered as expansion whereas below 50 is considered as contraction.  Therefore this would be the first expansion survey result in over 12 months by the sector’s leading purchasing managers.  If we get above 50, market would probably react with optimism and risk appetite sentiment could continue; if the release is below 50, market could react with some disappointment and profit taking could take place immediately after the release. 

DEFINITION:

The Institute of Supply Management (ISM) Manufacturing Index measures the activity level of purchasing managers in the manufacturing sector, with a reading above 50 indicating expansion. A rising trend has a positive effect on the nation’s currency. To produce the index, purchasing managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries, and inventories. Traders watch these surveys closely because purchasing managers, by virtue of their jobs, have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

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UPDATE: Risk sentiment initially drove the market only to be USD sentiment taking over.  As I explain different factors prior and post news releases, I urged everyone to stay out until the sentiment is over… then about 90 minutes after the release we jumped in on a trade following market cycle and pre-dominant trend, picked 30 immediately on record, but in real account we held the trade for about 100 pips of profit.  Overall 142 pips for the day and counting.

Related posts:

1. US ISM Manufacturing PMI 11/02/09
2. US ISM Manufacturing PMI m/m 12/01/09
3. US ISM Manufacturing PMI 01/04/10
4. US ISM Manufacturing PMI 10/01/09
5. US ISM Non-Manufacturing PMI 09/03/09
6. US ISM Non-Manufacturing PMI 11/04/09
7. US ISM Non-Manufacturing PMI 10/05/09
8. US ISM Non-Manufacturing PMI 08/05/09
9. UK Manufacturing PMI 09/01/09
10. Forex Plan For US ISM Manufacturing PMI 07/01/10