US: ISM Manufacturing PMI slumps to 53 in June vs. 54.9 expected

ISM Manufacturing PMI fell at a stronger pace than expected in June.
US Dollar Index continues to push higher after the data.

Eren Sengezer FXStreet

The business activity in the US manufacturing sector expanded at a much softer pace in June than it did in May with the ISM Manufacturing PMI dropping to 53 from 56.1. This print came in weaker than the market expectation of 54.9.

Further details of the publication showed that Employment Index declined to 47.3 from 49.6 and New Orders Index fell to 49.2 from 55.1. Finally, Prices Paid Index dropped to 78.5 from 82.2, compared to analysts' estimate of 81.

Commenting on the data, "the US manufacturing sector continues to be powered — though less so in June — by demand while held back by supply chain constraints," noted Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.

"Despite the Employment Index contracting in May and June, companies improved their progress on addressing moderate-term labor shortages at all tiers of the supply chain, according to Business Survey Committee respondents' comments," Fiore added. "Panelists reported lower rates of quits compared to May. Prices expansion slightly eased for a third straight month in June, but instability in global energy markets continues."

Market reaction

Wall Street's main indexes erased daily gains after the disappointing data and the dollar continued to gather strength as a safe haven. As of writing, the US Dollar Index was up 0.85% on the day at 105.62.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD bounces off four-day lows, still below 1.3500

GBP/USD sticks to the bearish tone on Thursday, coming down to the 1.3480 region in the latter part of the NA session. In the meantime, Cable’s weakness comes as investors continue to assess mixed UK data, poor US results, and the persistent uncertainty surrounding the US-Iran conflict.

EUR/USD looks apathetic around 1.1530

EUR/USD reverses Wednesday’s downtick and trades with modest gains in the 1.1530 region following the end of the NA session on Thursday. The pair’s tepid advance comes on the back of the absence of clear direction in the US Dollar despite tensions from the Middle East appear far from alleviated. Later on Friday, investors are expected to monitor the the releases of another revision of GDP figures in the Euroland, US Retail Sales and the preliminary U-Mich gauge.

Gold remains on the defensive below $4,350; downside seems cushioned

Gold trades below $4,350 during the Asian session on Friday and looks to extend the previous day's pullback from the highest level since June 5 as the US-Iran standoff continues to underpin the US Dollar's reserve-currency status. However, reduced bets for an immediate Fed rate hike, amid signs of cooling US inflation, should act as a tailwind for the non-yielding bullion and help limit deeper losses.

Dogecoin reclaims $0.07 support as whales step in

Dogecoin (DOGE) edges above the daily open, trading above $0.070 as of Thursday. While this uptick offers a positive signal, DOGE continues to trade within a broader bearish context, down approximately 12% from its July peak of $0.079. Still, should the $0.070 support level hold, the mild recovery could gather pace, targeting resistance at $0.080 and potentially the key $0.100 threshold.

Why credit markets aren’t pricing $570B of AI debt

Forecasts put global artificial intelligence related debt issuance near $570 billion this year, with roughly $236 billion of it priced by the end of May at four times the prior year's pace. Data centre securitisation alone has gone from about $4 billion a year through 2022 to roughly $10 billion in each of 2023 and 2024, and then $27 billion in 2025.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.