Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The August Manufacturing PMI declined to 51.5, after reporting a print of 51.9 in July. The headline manufacturing index came in lower than consensus expectations, with the underlying details of the report giving mixed signals.
The pace of new orders growth picked up to its fastest in five months (+1.1pp), while new export orders rose marginally (+0.1pp). Meanwhile, the output index remained broadly unchanged (+0.1pp) at 52.5 and backlogs of work fell at their quickest pace since March 2013 (-4.4pp).
The employment index dropped into marginally contractionary territory (-1.6pp) for the first time since April 2013. Input prices deteriorated significantly (to 41.0; -0.8pp), even as output prices fell to 50.4 (-1.5pp), after posting their highest reading since August 2014 last month.
The key take away message from the release is a trend of diverging domestic and export led manufacturing output. Domestic output and new orders have shown renewed strength, and with the positive signal from the recent CBI Industrial Trends Index (an average of -5.5 in Q2, increasing from -10 in July to -1 in August), manufacturing is set to stabilise, having deteriorated steadily since the cyclical highs reached in 2013.
"We are nonetheless cautious; we acknowledge risks to the downside given continued deterioration in new export orders, again supported by the recent CBI Industrial Trends Index ("many firms are still struggling in overseas markets" according to the CBI press release), which is likely to worsen given expected continued currency strength and recent global economic uncertainty. Overall, however, the mixed signals in the report and growing divergence between domestic and export led manufacturing support our view of continued moderation of PMIs going forward. This view is further supported by the average Manufacturing PMI figure for July and August being 51.7, the same as the average figure for Q2 2015", says Barclays.
