Price action yesterday remained resilient in the aftermath of China’s 7.1% fall on Monday morning. This resilience was even more impressive considering we are now entering what is a traditionally soft time for equities from the mid point of September through to October. As noted above commodities were the only other asset class that failed to escape the fall in Chinese equities but the commodity currencies held firm suggesting again that investors are looking through this volatility and focusing on the trend of economic data which generally continues to beat market expectations.

Yesterday economic data provided further evidence of the global recovery story. Today, attention is focused on the US ISM which after the better then expected results seen in New York , Philly Fed survey and Chicago PMI coupled with strong US factory orders suggests that ISM manufacturing could break back above the key 50 mark that indicates expansion; (market consensus is for 50.2). In Europe and the UK attention will also be focused on manufacturing PMI which again is likely to show a further improvement.

Beyond today’s likely upbeat economic data results investors will then turn their attention to two other key events. The ECB meeting on Thursday is expected to see an upgrade to the growth forecasts. Meanwhile, on Friday we have the key non-farm payrolls number in the US which is expected to show that the unemployment rate continued to rise last month to 9.5% but the pace of job losses is expected to slow.

Sources: Reuters: BBC: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times: Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia:

Please note this report provides a guide to some of the relevant areas that individual investors should consider discussing with an authorised adviser in relation to their specific circumstances, it does not constitute individual advice. As a result no action should be taken or refrained from being taken as a result of its content.