US DATA: ISM Mfg New Orders Highest Since 2022 As Pre-Tariff Recovery Extends
- The ISM manufacturing index was stronger than expected in January at 50.9 (cons 49.9) after a slightly downward revised 49.2 (initial 49.3) as the manufacturing sector continues a strong recovery seen off October lows of 46.9.
- It follows the particularly strong recovery in the regional Fed surveys that we have been flagging (see most recently here), although those gains have admittedly been particularly concentrated in the Philly survey.
- New orders led the increase on the month, increasing to 55.1 from a downward revised 52.1 (initially 52.5) for a fresh high since May 2022.
- Business export orders are lower at 52.4 but show a similar relative trajectory, rising from 50.0 for also their highest since May 2022.
- The press release on new orders: “Of the six largest manufacturing sectors, four (Petroleum & Coal Products; Machinery; Chemical Products; and Transportation Equipment) reported increased new orders. Panelists noted an improved level of demand performance, with a 2-to-1 ratio of positive comments versus those expressing concern about near-term demand, an improvement compared to December. Capital and export orders were significant contributors.”
- Imports “Imports expanded this month after contracting for seven months in a row, preceded by five consecutive months of expansion and 14 consecutive months of contraction prior to that. Imports re-entered growth as inventory constraints weaken, tariff countermeasures are put in place, a ports strike was avoided and the deliveries from the Lunar New Year season arrive at U.S. ports".
- Prices paid meanwhile were close to expectations as they increased to 54.9 (cons 54.8 with a typically small survey of just 5 responses) after an unrevised 52.5. It pokes above the 54.8 in October for the highest since May.
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JGB TECHS: (H5) Returns Lower
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 144.48/146.53 - High Nov 11 / High Aug 6
- PRICE: 142.12 @ 15:01 GMT Jan 03
- SUP 1: 141.65 - Low Dec 30
- SUP 2: 141.56 - 1.764 proj of the Aug 6 - Sep 3 - 9 price swing
- SUP 3: 141.05 - 2.000 proj of the Aug 6 - Sep 3 - 9 price swing
Markets slipped on the hawkish Fed and are yet to fully recover, touching 141.65 on the way lower. Medium-term trend signals on the continuation chart continue to point south. A resumption of the trend would pave the way for a move towards 141.56, a Fibonacci projection point on the continuation chart. A stronger recovery would open 144.48, the Nov 11 high. Further out, key resistance is at 146.53, the Aug 6 high (cont).
USDCAD TECHS: Bull Flag Highlights A Clear Uptrend
- RES 4: 1.4669 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4392 @ 15:50 GMT Jan 3
- SUP 1: 1.4336 Low Dec 20
- SUP 2: 1.4307/4232 20-day EMA / Low Dec 17
- SUP 3: 1.4136 50-day EMA
- SUP 4: 1.4011 Low Dec 5
USDCAD is unchanged and bulls remain in the driver’s seat. The latest pause appears to be a flag formation - a bullish continuation signal. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4307, the 20-day EMA. A pullback would be considered corrective.
AUDUSD TECHS: Southbound
- RES 4: 0.6471 High Dec 9
- RES 3: 0.6408 50-day EMA
- RES 2: 0.6341 High Dec 18
- RES 1: 0.6247/6282 High Dec 30 / 20-day EMA
- PRICE: 0.6204 @ 15:21 GMT Jan 3
- SUP 1: 0.6179 Low Dec 31
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
A bearish trend condition in AUDUSD remains intact and the pair continues to trade closer to latest lows. Recent weakness maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for an extension towards 0.6158 next, a Fibonacci projection. Initial firm resistance to monitor is 0.6282, the 20-day EMA.
