ISM manufacturing index big beat and GDP tracking update - Nomura

Analysts at Nomura explained that the ISM manufacturing index rose to 61.3 in August, above expectations (Nomura: 57.5, Consensus: 57.6), from 58.1 in July. 

Key Quotes:

"Despite trade uncertainties, the ISM index reached the highest level since May 2004 and points to continued strong activity with broad-based gains in subindices. That said, respondent comments suggest concerns over trade policies remain acute. Expected escalation in trade tensions with China has the potential to weigh on business sentiment."

GDP tracking update: 

"Private nonresidential construction spending was somewhat weaker than we expected, implying less business structures investment in Q3. In addition, private residential construction spending was weaker than we expected and implies weak residential investment. However, state and local government construction spending was stronger than we expected, suggesting firmer growth in government spending. Altogether, after rounding, our Q3 real GDP tracking estimate is unchanged at 3.2% q-o-q saar. Modest upward revisions to June construction spending raised our tracking estimate for the final release Q2 real GDP by 0.1pp to 4.3% q-o-q saar."