The latest round of U.S. manufacturing PMI releases showed a mixed picture, with S&P Global revising its initial readings higher while the closely watched ISM PMI showed a deeper contraction than the markets had expected:
- S&P Global final manufacturing PMI jumped from 50.0 to 51.3 in May (vs. 50.9 initial reading)
- ISM’s manufacturing PMI slipped from 49.2 to 48.7 in May (vs. 50.0 forecast)
Link to S&P Global U.S. Flash Manufacturing PMI
Components of ISM’s report reflected a slowdown in demand, with New Orders and Backlog of Orders Index contracting faster while New Export Orders and Customers’ Inventories Index barely tread water.
Underlying data also showed Prices increasing at a slower rate from 60.9 to 57.0 and Employment growing from 48.6 to 50.2.
Timothy Fiore, who is ISM Chair for the Manufacturing Business Survey Committee, details:
“Demand remains elusive as companies demonstrate an unwillingness to invest due to current monetary policy and other conditions. These investments include supplier order commitments, inventory building and capital expenditures.”
Market Reactions
U.S. dollar vs. Major Currencies: 5-min
Overlay of USD vs. Major Currencies Chart by TradingView
The U.S. dollar, which started an intraday downtrend near the start of European session trading, briefly traded higher at S&P Global’s upward PMI revision.
However, the Greenback saw a fresh and broad downswing following ISM’s PMI release.
USD saw more sustained pullbacks against CAD, AUD, NZD, and JPY and barely came up for air against EUR, GBP, and CHF. Despite the pullbacks, though, the dollar still ended the day broadly lower against its major counterparts.
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