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Analysts at Nomura note that the US ISM manufacturing index fell 2.1pp in October to 57.7, below expectations (Nomura and Consensus: 59.0), suggesting some deceleration in manufacturing momentum.

Key Quotes

“Both the production and new orders indices in the ISM survey fell, by 4.0pp to 59.9 and 4.4pp to 57.4, respectively.”

“The new orders index now sits at its lowest level since April 2017. The new export orders index fell 3.8pp to 52.2, its lowest level since November 2016, consistent with moderating external growth and a stronger US dollar.”

“The employment index declined 2.0pp to 56.8, consistent with our expectation of some moderation in manufacturing hiring in October but a still healthy reading. The prices paid index increased 4.7pp to 71.6 but remains below its six-month average of 73.4, suggesting continued upstream price pressures.”

“Today’s ISM report suggests that concerns over US trade policy and its impact on supply chains is starting to outweigh steady manufacturing outlook that has been supported by strong domestic demand.”