US: S&P Manufacturing PMI drops to 49.9 vs. 51.2 expected
- US S&P Manufacturing PMI dropped into contraction territory in early October.
- US Dollar Index fell below 112.00 on disappointing PMI surveys.
Business activity in the US manufacturing sector contracted slightly in early October with the preliminary S&P Global Manufacturing PMI declining to 49.9 from 52 in September. This reading came in weaker than the market expectation of 51.2.
Further details of the publication revealed that the Services PMI slumped to 46.6 from 49.3 and the Composite PMI fell to 47.3 from 49.5. Both of these prints fell short of anaylsts' projections.
Commenting on the data, "the US economic downturn gathered significant momentum in October, while confidence in the outlook also deteriorated sharply," noted Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.
"The decline was led by a downward lurch in services activity, fuelled by the rising cost of living and tightening financial conditions," Williamson added. "While output in manufacturing remains more resilient for now, October saw a steep drop in demand for goods, meaning current output is only being maintained by firms eating into backlogs of previously placed orders."
Market reaction
The greenback lost interest after the data with the US Dollar Index declining below 112.00.