US Dollar: Data-heavy week guides rates and ISM outlook – TD Securities

TD Securities strategists note that recent US rate moves reflected shifting headlines on Iran and month-end flows, while upcoming US data will be crucial. They expect the ISM Manufacturing index to rise and forecasts a soft nonfarm payrolls print with higher unemployment, keeping focus on the Dollar and US yields over the coming days.

US curve, payrolls and ISM focus

"The curve steepened on Friday, after back and forth headlines around an end to the war in Iran caused rates to move on conflicting headlines from both sides. Rates also rallied at the end of the day into month-end amid a 0.10y month-end extension for Treasuries."

"We expect a dovish headline of 60k, with the UE rate edging higher to 4.4%. In addition to NFP, ISM services, and manufacturing as well as JOLTS and ADP earlier in the week will be watched. The Supreme Court is also likely to hand down decisions on Thursday."

"We expect the ISM manufacturing survey to gain momentum in May after stalling so far in 2026. We look for a 1pt gain to 53.7 (consensus: 53.0), with a rebound in production acting as the main driver."

"The prices paid index will garner also attention amid the ongoing oil shock. Higher input costs are also likely to continue weighing on respondent comments."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)