Dallas Fed Manufacturing Index Beat Analyst Expectations

Key Insights

• Dallas Fed Manufacturing Index increased from -20 in July to -17.2 in August. 
• Production index declined from -4.8 to -11.2.
• New orders index grew from -18.1 to -15.8.

On August 28, the Federal Reserve Bank of Dallas released Dallas Fed Manufacturing Index report. The report indicated that Dallas Fed Manufacturing Index improved from -20 in July to -17.2 in August, compared to analyst consensus of -21.6.

The production index fell from -4.8 in July  to -11.2 in August, which was its lowest level since May 2020. New orders index improved from -18.1 to  -15.8, while capacity utilization index declined from -2.4 to to -3.7.

Overall, the report highlighted the challenging situation in the manufacturing sector. Treasury yields are moving lower today as bond traders continue to digest Powell’s comments from the Jackson Hole Symposium. It remains to be seen whether Fed will raise rates again this year amid problems in the manufacturing sector.

U.S. Dollar Index is moving lower as traders focus on the pullback in Treasury yields. Currently, U.S. Dollar Index is trying to settle below the 104.10 level. It should be noted that U.S. Dollar Index remains close to multi-week highs.

Gold is trying to climb above the $1920 level amid rising demand for precious metals. The report did not have a material impact on gold markets as traders remained focused on China’s efforts to boost its economy.

SP500 settled near session highs at 4435. The Fed may be less hawkish due to the problems of the manufacturing sector, which is bullish for stocks.

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