The hand of the all-encompassing Federal Reserve loomed over markets, with falling manufacturing triggering risk appetite on Wall Street.

The distorting influence of the US Federal Reserve’s economic policies were to be seen everywhere last night. On a night where the ISM survey fell below the 50 barrier, it was risk on! Eventually – and in the US at least. To be fair, we have seen the ISM survey (which is one of the few good ones) flirt with the 50 line a few times before  – in 2011 and 2012. One month doesn’t really signal anything and you need to see a sustained movement below 50 (below 42 if you’re talking about the whole economy) to be concerned. We’re nowhere near that at the moment. But production did fall sharply in June according to the survey, as did new orders. As in past years I would not worry about this, noise at the moment and the usual tidal flows that you would see in any robust economic expansion.


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