Summary:
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ISM manufacturing index 59.3 vs 57.5 exp
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New orders and employment recover
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USD trading lower against most of its peers
The main data releases today have centred on the manufacturing sector with the latest figures from the US topping estimates. For the month of November the ISM index from the US rose to 59.3 vs 57.5 expected with the past print 57.7. The rebound see the gauge return to around the middle of the level seen in the past 18 months after it was threatening to push lower in October.
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The ISM Manufacturing index bounced back last month, improving to move back to roughly the middle of its recent range. Source: Bloomberg
As well as the improvement in the headline index there was pleasing recoveries in some of the subcomponents of the report with the following listed as actual vs expected unless otherwise stated:
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Employment: 58.4 vs 56.8
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New Orders: 62.1 vs 57.4 last
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Production: 60.6 vs 59.9
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Prices paid: 60.7 vs 71.6
The rebound in employment and new orders are the main positives here but the fall in prices paid is a little worrying for the US dollar. The fall to 60.7 represents the largest decline in 6 years, with the plunging prices for oil, a major contributor of manufacturing expenses, may be a contributor to the drop. While the ISM release is often one of the bigger pieces of US data, today it is very much playing second fiddle to the fallout from the G20 meeting which has seen the greenback slide across the board against nearly all of its peers.
At the time of writing the dollar is only in the green against the Turkish Lira and Mexican Peso, with declines seen against all other currencies. The biggest gainer is the Brazilian Real, which has risen by 0.9% on the day. Source: xStation
In terms of major currency crosses, the GBPUSD is one of the worse performing and while it is just about higher on the day, after a bright start the market has come back under pressure. The pound is trading heavy as concerns surrounding PM May’s ability to get her deal passes through parliament grows and cable is back near potentially key support. The 1.2660-1.2720 region has provided a floor for the past few months but shorts are threatening to make what could be seen as a possibly decisive break lower.
GBPUSD has fallen back today after beginning brightly and the market is once more testing key longer term support in the 1.2660-1.2720 region. Source: xStation
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