The ISM Manufacturing New Orders Index in the United States increased from 47.7 to 57.1 in January. This rise indicates an improvement in manufacturing and may suggest a stronger economy.
Other reports show that the CNY is gaining strength against the dollar, while silver prices have dropped over 5% due to U.S. data affecting market sentiment. Additionally, there are updates on Thailand’s economic outlook before the elections and a suspension of U.S. government data impacting economic reports.
Currency Movement And Commodities
Recent changes in currency values include the EUR/USD falling below 1.1800, while GBP/USD has rebounded to 1.3640. Gold is trying to stabilize below $4,700, and Ethereum has seen a rise, with holdings increasing to over 4.28 million ETH.
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The rise in January’s ISM Manufacturing New Orders to 57.1 marks a significant change from previous contractions. Considering the ongoing weakness in manufacturing throughout much of 2025, this is a notable reversal that indicates renewed economic strength. Traders should expect this to be one of several data points confirming a better growth outlook.
This renewed strength complicates interest rate predictions, likely delaying any expectations for a Federal Reserve rate cut. The latest Consumer Price Index (CPI) data from late 2025 remains steady at around 3.1%, suggesting that positioning for a “higher for longer” interest rate environment is crucial. This may involve using options to protect against rising bond yields.
Impact On Equities And Commodity Markets
For equities, this data strongly supports cyclical sectors such as industrials and materials over defensive ones. Increased interest in call options on broad market indices like the S&P 500 and industrial-focused ETFs is expected. Implied volatility is likely to decrease due to this positive news; the VIX has already fallen below 14 for the first time this year, making long option strategies more affordable.
The outlook for industrial commodities, such as copper, which has recently risen above $3.85 per pound, is now much more positive. This economic strength also enhances the U.S. dollar, making put options on currency pairs like the EUR/USD more attractive. We see this as a clear signal to prepare for rising demand for raw materials and a stronger dollar.
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