US Manufacturing PMI Matches 20-Month High

The November final Markit PMI manufacturing index was revised up to 54.1 from the flash reading of 53.9 and October’s 53.4. This was the joint-highest reading since March 2015 and above consensus expectations of 53.9.

The rate of incoming orders and production volumes both increased to the strongest levels since March 2015. The strength in orders was concentrated in the domestic economy with only a marginal increase in export orders as currency impact had a significant effect.

There was a reversal in inventories trends with an increase in stocks for the second successive month after contractions during the third quarter. Order backlogs increased for the sixth successive month, the longest continuous period since late 2015, which will underpin near-term production trends.

There was a modest increase in employment for the month as caution surrounding payrolls continued.

Input price pressures remained moderate with an easing from two-year peaks seen in October, while there was a slower rate of increase in output prices for the month.

The data will maintain underlying confidence in the manufacturing sector, although there will also be growing speculation that the strong dollar will undermine export activity and curb inflationary pressures.

The Fed will increase rates in December, but dollar strength will lead to some caution surrounding the 2017 outlook.

The dollar overall maintained a robust tone with USD/JPY moving back above the 114.50 level with US Treasuries under further pressure as the 10-year yield moved above 2.45%. US equities were slightly lower as Nasdaq continued to under-perform.

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Tim Clayton

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NamePrice($)CommentChange($)Change %
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Copper Dec 162.62-0.01-0.36%