The latest round of US manufacturing PMI releases showed a mixed picture, with S&P Global revising its preliminary readings higher while the closely watched ISM PMI showed a deeper contraction than markets expected:
- S&P Global's final manufacturing PMI jumped from 50.0 to 51.3 in May (vs. initial 50.9 reading)
- ISM Manufacturing PMI fell from 49.2 to 48.7 in May (vs. 50.0 expected)
Link to S&P Global Flash US Manufacturing PMI
Components of the ISM report reflected a slowdown in demandwith the index of new orders and backlog of orders shrinking faster while the index of new export orders and customer inventories barely stabilizes.
The fundamental data also showed prices rising at a slower rate from 60.9 to 57.0 and employment growing from 48.6 to 50.2.
Timothy Fury, ISM Chairman of the Manufacturing Business Survey Committee, explains:
“Demand remains elusive as companies show an unwillingness to invest due to current monetary policy and other conditions. These investments include supplier order commitments, inventory builds and capital expenditures.
Market reactions
US dollar against major currencies: 5 minutes
Overlay of the US dollar against major currencies Chart by TradingView
The US dollar, which began an intraday downtrend near the start of the European trading session, briefly traded on an upward revision to the S&P Global Purchasing Managers' Index (PMI).
However, the US dollar saw a fresh and broad decline following the release of the Purchasing Managers' Index (ISM).
The US dollar saw further sustained declines against the Canadian dollar, Australian dollar, New Zealand dollar and Japanese yen and barely rose against the euro, British pound and Swiss franc. Despite the declines, the dollar still ended the day broadly lower against its major counterparts.
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