ISM or Institute for Supply Management is releasing its PMI (Purchasing Manager Index) today. As a leading indicator, traders generally pay attention to this report for hints of economic trend.

15:00 Am GMT
Forecast 57.8
Previous 58.5

The first workday of the month marks the release of the ISM Manufacturing report and at the risk of sounding like a broken record the report will likely show that the US manufacturing sector continues to grow at a strong pace, but with increasing price pressures as well. Of the regional PMI reports, the Chicago PMI yesterday once again attempted to jump into the stratosphere printing 68.8, by far the highest reading in this expansion. Indeed this was the highest reading since July 1988 (!) where it recorded 71.5. However, the Chicago PMI has been showing too high growth of late compared to the national PMI (ISM Manuf.) and we do not expect the latter to move at the same pace. Instead, we look for this very robust growth to continue, but at a somewhat slower pace of 57.5, down from the recently upward revised December reading of 58.5.

U.S. ISM Manufacturing PMI current expectation is way above the medium 50 level at 57.0 and this release is considered as expansion in the manufacturing sector. ISM PMI's are leading indicator as stated before, and usually they do not affect the long-term trend of the market, unless we get a huge surprise. However, in a week such as this week, with NFP scheduled on Friday, PMI's usually would have more market impact.