- Economic activity in the United States' manufacturing sector weakened in September.
- The US Dollar Index lost its traction and erased its daily gains on the dismal data.
The Insittue for Supply Management's (ISM) Manufacturing Purchasing Managers' Index (PMI) in September dropped to 47.8 in September from 49.1 in August to show a contraction in the manufacturing sector's business activity at a stronger pace than expected. This reading also came in below the market expectation of 50.1.
With the initial market reaction, the US Dollar Index reversed its direction and started to pull away from the multi-year high that it set at 99.67 earlier in the session. At the moment, the index is up 0.04% on the day at 99.44.
Below are some key takeaways from the ISM's press release.
"Comments from the panel reflect a continuing decrease in business confidence. September was the second consecutive month of PMI contraction, at a faster rate compared to August."
"Demand contracted, with the New Orders Index contracting at August levels, the Customers’ Inventories Index moving toward ‘about right’ territory and the Backlog of Orders Index contracting for the fifth straight month (and at a faster rate)."
“Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding near-term growth.”
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