ISM Manufacturing PMI Drops To 48.7, Missing Analyst Expectations

ISM Manufacturing PMI report showed that the economic activity contracted for the 18th time in the last 19 months, highlighting the challenging situation in the manufacturing sector.

New Orders Index declined from 49.1 in April to 45.4 in May, while Production Index decreased from 51.3 to 50.2.

The Institute for Supply Management commented: “Demand remains elusive as companies demonstrate an unwillingness to invest due to current monetary policy and other conditions […] Suppliers continue to have capacity, with lead times improving and shortages not as severe.”

Today, traders also had a chance to take a look at the final reading of S&P Global Manufacturing PMI report. The report showed that S&P Global Manufacturing PMI improved from 50 in April to 51.3 in May, compared to analyst consensus of 50.9.

U.S. Dollar Index tested session lows as traders reacted to the disappointing ISM Manufacturing PMI report. Currently, U.S. Dollar Index is trying to settle below the 104.25 level. Treasury yields are moving lower, which is bearish for the American currency.

Gold moved above the $2340 level as traders focused on falling Treasury yields and U.S. dollar’s pullback.