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The US ISM Manufacturing PMI  is seen improving modestly in January. Markets will also look at the ISM Prices index and the Employment index.  EUR/USD remains under pressure around the 1.0400 zone.  Excitement is building as the Institute for Supply Management (ISM) prepares to release the January US Manufacturing Purchasing Managers’ Index (PMI) this Monday. This report is a key barometer of the health of the United States (US) manufacturing sector and offers valuable insights into the broader economy’s direction. Here’s what to watch for: PMI Thresholds: A PMI above 50.0 signals that the manufacturing sector is expanding, while a reading below 50.0 indicates contraction. Expectations: Analysts are anticipating a PMI of 49.5 for January. This is a slight improvement from December’s 49.3, suggesting a modest easing in contraction but still below the critical 50.0 mark. Despite the slight uptick, the January PMI is expected to remain in contraction territory. However, it’s important to note that the overall economy has been on an expansion path for an impressive 56 months, with only a brief dip in April 2020 during the height of the pandemic. What to expect from the ISM manufacturing PMI report? In December, the manufacturing sector showed promising signs of growth for the second month in a row, thanks to an improvement in the ISM Manufacturing PMI. The ISM Manufacturing PMI has several key components. First, the New Orders Index kept expanding for the second consecutive month, indicating that manufacturers are receiving more orders. In December, the Production Index bounced back into expansion territory after six months of contraction, signaling that factories ramped up their output. Meanwhile, the Prices Index continued to rise, reflecting ongoing increases in production costs. One interesting highlight is the Backlog of Orders Index, which climbed to 45.9 percent in December, up 4.1 percentage…

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Filed under: News - @ February 3, 2025 9:23 am