FxWirePro: Daily Commodity Tracker - 21st March, 2022 
New York Fed Empire State index slipped to negative 4.2 from a positive 0.6 in July. Analysts had expected the index to improve to 2.5 in August. The index has been in negative territory for four months in the year indicating deteriorating conditions. The six-month outlook worsened to 23.7 in August from 29.2 in July.
The details of the report were not as weak as the headline. Orders moved into positive territory (to +1.0 from -1.8 in the prior month) while shipments improved (to 9.0 from 0.7 in the prior month). Decreases were seen for delivery time (by -7.4p) and prices paid (by -3.2p).
“Overall we think manufacturing is now expanding slowly, but no boom is in prospect,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
The reading widely missed expectations and led investors to push back expectations for the next U.S. rate hike. Fed funds futures are currently pricing in just a 9 percent chance of a rate hike by September. December odds were at around 45 percent. Focus will now be on Wednesday’s Fed minutes of the July policy meeting for fresh clues on the timing of the next rate hike.
Empire is the first of a wave of regional manufacturing reports and will be followed by the Philadelphia Fed index to be released on Thursday.
