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Commenting on the ISM’s January PMI data, “the ISM Manufacturing index improved clearly in January after reaching its lowest level since the financial crisis in December,” said Nordea Markets analysts. “However, the index will likely decline again in February due to the coronavirus.”

Key quotes

“The January ISM Manufacturing number surprised clearly to the upside with a reading at 50.9 (consensus: 48.5, December: 47.2).”

“The details of the report were also more comforting with New Orders and Production clearly rising after the latter seemingly collapsed in December. The unusually large jump in the Production Index indicates that much of the Boeing production halt was “frontloaded” in December.”

“Overall, today’s ISM print was a clear positive surprise with the numbers likely to have been boosted by the US-China Phase-1 trade deal. Markets have therefore also reacted by sending US yields up a few basis points. The bad news is, however, that the ISM Manufacturing Index will most likely decline again in February due to the impact of the coronavirus, while the unusually large jumps in several of the subcomponents also look unsustainable.”