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ISM Manufacturing Index Actual 42.8, Expected 42.2, Previous 40.1
 
Release Explanation: Similar to the PMI numbers, it surveys Purchase Managers on their sentiment on orders, hiring, inventories, and deliveries. A number above 50 indicates expansion in the sector while a number below indicates contraction. Split into the Manufacturing Index (above), and then Manufacturing Prices which look at the rate of Inflation when materials and services are purchased. Builds an economic picture of the strength of manufacturing activity ahead of official Government reports. These numbers usually are a pre-cursor to the PMI numbers later in the month. A currency can be very reactive to these numbers as over time they have been a reliable read on Government reports to come.
 
Trade Desk Thoughts: The Institute for Supply Management (ISM) said today that their manufacturing index for March was 42.8, better than the 42.2 economists had expected to see.

While employment and inventories continue to decline at a rapid rate and the sector continued to contract during the month, there are signs of improvement. May is the first month of growth in the New Orders Index since November 2007, with nine of 18 industries reporting growth. New orders are considered a leading indicator, and the index has risen rapidly after bottoming at 23.1 percent in December 2008.

The Customers' Inventories Index remained below 50 percent for the second consecutive month, offering encouragement that supply chains are starting to free themselves of excess inventories as nine industries report their customers' inventories as 'too low'. The prices that manufacturers pay for raw materials and services continued to decline, but at a slower rate than in April.
 
Forex Technical Reaction: Stocks, which were already trading in positive territory, gained even further after the release, while the dollar continues to weaken in the broad market.