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 partially recovered in January after a large fall in December. According to the Institute of Supply Management (ISM) January survey, its Purchasing Managers Index recorded a reading of 56.6, up from December’s reading of 54.3 and more than the expected figure, which was also 54.3. The average reading since 1948 is 52.9.
US bond yields finished the day higher while the US dollar was largely unchanged against other major currencies. 2-year Treasury bond yields finished 3bps higher at 2.49%, 10-year yields increased by 5bps to 2.68% and 30-year yields were 3bps higher at 3.03%.