Purchasing Managers’ Indices (PMIs) are economic indicators derived from monthly surveys of purchasing and supply executives in private sector companies. They are diffusion indices, which means a reading of 50% represents no change from the previous period, while a reading under 50% implies respondents on average reported a deterioration. Their usefulness lay in being a leading indicator of GDP.
US manufacturing activity rebounded in November after a minor fall in October. According to the Institute of Supply Management (ISM) November survey, its Purchasing Managers Index recorded a reading of 59.3, up from October’s reading of 57.7 and more than the expected figure of 58. Readings at these levels are very much in the elevated range.
US bond yields reacted in a mixed way. While 2-year Treasury bond yields increased by 4bps to 2.82%, 10-year yields fell by 2bps to 2.97% and 30-year yields dropped by 4bps to 3.25%. The US dollar was weaker against the euro but stronger against the yen and sterling.