Release Explanation: The total value of the output from mines, industrial factories and utilities is in the Industrial read. The value of manufactured goods is in the Manufacturing read. The Shipment number covers the amount sent abroad. Capacity Utilization cover at what rate Factories are running at compared to the maximum. High production numbers usually denote an economy in an upwards trend, or growth period. These reports are reactive to change and are well respected. GDP will normally be directly affected by the Industrial Production component. Durable Goods and Retail Sales will normally be affected by the Manufacturing aspect of the report. A currency will eventually be affected by these numbers, but only once they filter through to the main releases.
Trade Desk Thoughts: Industrial production declined in January for the sixth time in the past seven months as the global economic slowdown deepened. Production fell 1.8% after declining by a downwardly revised 2.4% in December.
Producers are cutting back as demand and prices nosedive, said Matthew Carniol, chief currency strategist at TheLFB-forex.com. Expect to see further reduction in output at least through the first half of the year.
Capacity utilization fell to 72%, the lowest since February 1983, from 73.3% in December.
Production of motor vehicles and parts plummeted 23.4% during January according to today's report, following an 8.1% drop in December. Automakers produced cars and light trucks at a 3.9 million annual an annual rate, the lowest since records began in 1967. That was down from 6.61 million in December.
Forex Technical Reaction: Stocks turned negative after the open and were recently down 0.31%. The dollar has continued to gain against the majors.
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