ISM Higher then expected

The ISM Manufacturing Survey for September printed 59.4, higher than expected and the highest result for the year. The subcomponents were strong across the board, particularly New Orders and Production. The Prices Paid component shot up to 78.0 from 62.5 in August, probably on the back of higher energy prices. Before the hurricane, the economy had considerable momentum behind it and the Chicago PMI and ISM Manufacturing Index show that the economy is bouncing back from the hurricane. The 59.4 print for ISM Manufacturing is consistent with real GDP growth of just under 5.0% y/y. We are sticking with our 3.6% growth forecast for Q3 as consumption is likely to contribute less to the total because of higher energy prices. The first estimate of Q3 GDP will be released October 28. Brazil posted a trade surplus of USD4.3bn in September, up from USD3.67bn in August. Year date, the trade surplus has been USD32.7bn.