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Analysts at TD Securities note that the US ISM manufacturing index surprised markedly to the downside in September, dropping below their and market expectations to 47.8 from 49.1 before “” its lowest level in a decade (TD: 50.8; mkt: 50.0).

Key Quotes

“The decline was driven by notable decreases in production (47.3 from 49.5), inventories (46.9 from 49.9) and employment (46.3 from 47.4). While new orders remained in contractionary territory despite improving marginally to 47.3 in September from 47.2.”

“The overall report is disappointing and continues to highlight the retrenchment in the manufacturing sector, which likely remains in recession. Note that an ISM reading below 43.2 would suggest an economy-wide recession. In this vein, the ISM non-manufacturing release, out Thursday, will be a key figure to follow.”