ISM Manufacturing PMI at 53.5 – Not as Bad as NFP

US  ISM Manufacturing PMI dropped from 54.8 to 53.5 points – worse than expected, but not a huge disappointment.

A score of 54 was expected. This is still in the growth zone, of above 50 points. EUR/USD remains on high ground, above 1.24.

The employment component slid from 57.3 to 56.9 points – not a big change and still high. Prices took a dive from 61 to 47.5 points. New orders surprised to the upside, rising from 58.2 to 60.1 points.

The comments in the report were generally positive. The overall economy completed three years of expansion according to ISM.

The headline number of 53.5 is a bit lower than the new Markit manufacturing PMI for the United States, which stood on 54 points in May.

Earlier, the all important Non-Farm Payrolls report was a huge disappointment: the US gained only 69K jobs and the unemployment rate is at 8.2%, higher than expected.

The initial reaction was classic “risk aversion”: the dollar and the yen strengthened against all the rest.

But this was later followed by a huge comeback of the euro. Here are five reasons for the euro comeback. The pair went all the way from 1.2288 to 1.2460 before sliding back under 1.24.

US Construction Spending, also released at the same time, was also marginally disappointing: rising 0.3% instead of 0.4% expected. Yet last month’s figure was revised from +0.1% to +0.3%.