US: ISM shows signs of turnaround in manufacturing – Nomura

By FXStreet Research Team at Nomura, notes that in the US, the Institute for Supply Management (ISM) reported that its headline manufacturing index increased by 1.3pts to 49.5 in February, above expectations (Nomura: 48.2, Consensus: 48.5).

Key Quotes

“With the index in contraction territory (below 50) for five consecutive months, it is likely that activity in the manufacturing sector continued to contract in February, just not as much as before, with the index at its highest level since September.

Indeed, “hard” data on the industrial sector in January, such as industrial production and durable goods orders, beat expectations and also provide a sign of better demand on the horizon.

In addition, prices of some industrial materials appear to have bottomed out recently as Commodity Research Bureau’s (CRB) spot price indices for metals and raw industrials stopped falling and rebounded slightly in the past few months. It appears that we may have finally seen the bottoming out of activity in the manufacturing sector. But the turnaround in activity will likely be gradual, given various headwinds still remain.

On the details of the report, the measures of current activity remained above 50 in February – the production subindex increased by 2.6pts to 52.8 and the new …read more

Source:: FX Street