The ISM Manufacturing report for April declined from 50.7, down from 51.3, the lowest since December 2012. The good news: it was still above 50 and beat expectations of a 50.6. The Employment Indicator, which came at 50.2, down 4 on the month and was the lowest since November, tied with the biggest drop since 2008 in absolute terms since the Great Financial Crisis started.

With most of Asia and Europe out for May holiday it was a quiet session overnight. Markets opened negative giving back the previous days gains as NY opens.

We await the FOMC decision later today but note that Ben Bernanke is not going to testify – which should reduce market volatility around this event. Tomorrow’s ECB decision is getting a lot of attention as the market anticipates a rate cut.

Cyprus loan deal was approved yesterday and included in the measures was “sale of assets and gold”. Cyprus holds 13.9 tons of gold and we do not believe it has been sold as yet. Even when Cyprus sells their gold it is very likely it will be done in an off market transaction with another central bank who sees this fire sale as an opportunity to diversify their reserve portfolio.

 

Reference Zero Hedge (Tyler Durden)                     www.donfilippo.ca

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