Release: US Empire Manufacturing Index (Mar)
Consensus Forecast: 17.6
Previous: 19.5
Date/Time: 03/15/12 8:30 AM ET (12:30 GMT)

Release: US Philly Fed Manufacturing Index (Mar)
Consensus Forecast: 11.8
Previous: 10.2
Date/Time: 03/15/12 10:00 AM ET (14:00 GMT)

Will Manufacturing Data Continue the Momentum in US Data?

Though some of the excitement might be gone following the FOMC announcement earlier in the week (which carried a slightly less dovish tone) manufacturing reports on Thursday would give further guidance as to whether the US economy continues to show momentum.

After the strong non-farm payroll report last Friday and the largest increase in retail sales in five months the focus at the end of the week will turn to manufacturing data.

Both the New York Fed Empire manufacturing index and the Philly Fed manufacturing indexes are expected to show modest expansion in activity.

The Empire index is expected to cool slightly to 17.6 in March from 19.5 in February.

The Philly Fed is forecast to rise to 11.8 from 10.2.

As can be seen in the charts above both have rebounded from negative readings in the summer months of 2011.

While this doesn’t necessarily jive with the latest ISM manufacturing PMI data which showed a slowdown in positive activity in February, it does confirm what the NFP jobs report showed us – that manufacturers are picking up the pace of hiring.

If the manufacturing data comes in above expectations it should continue to fuel expectations that the manufacturing sector will be able to add jobs and continue the theme of momentum in the US economy, which in the a positive for equities which had managed to hit the highest level since prior to the 2008 crash.

With the FOMC not providing direction either way in terms of future monetary easing will have to continue to assess the incoming data from the US, and being leading indicators for an important sector like manufacturing these reports can be used as clues for the health of the US economy during the March period.

With expectations around Fed QE likely diminished further there is a chance the USD extends its recent gains, even if it comes amid relative strength in US equities. That’s a mix – both stronger equities and stronger USD – that certainly hasn’t been common the past few years, but could be an interested correlation in the short term as markets unwind the remnants of heightened speculation around QE.

For more on the USD index see our technical update: USD Index Confirming Bullish Breakout After the FOMC Statement; 82.00 in Sight

We’ll review these releases and the market’s reaction in our daily Market Intelligence Briefing on Wednesday. For information on special subscription rates for FXTimes briefings, click here.

Nick Nasad is a macro economist, market analyst, and educator; and one of the main contributors to  FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.