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Digging deeper into the ISM data- EUR/USD grinds a little higher

The devil is sometimes in the detail and when looked at, this ISM report certainly has some moving parts. As noted here earlier, the index itself fall back into contractionary territory, below 50 (49.2) and that is not great news. Neither was the new orders component also falling back to 49.1 from 51.4. The prices paid shot to 60.9 from 55.8, but employment rose, to 48.6 from 47.4. So, what we have is rising prices, rising employment but lower orders and demand. Well, if you are confused then you are not alone. This analyst is still trying to make sense of all that data and so are the markets by the looks of it. Of course this is just one data point and it is way too early to start talking, or even muttering that dreaded Stagflation word, but if this a theme that if continues, could be a major concern. The dollar is equally confused by the looks of it too and outside of the USD/JPY, the price action versus Europe has been pretty stunted, but it is edging a little lower now, as the EUR/USD grinds its way closer to the 1.0700 handle once more, currently trading at 1.0685 

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