ISM Manufacturing PMI

What it is

The Institute for Supply Management (ISM) Manufacturing PMI is a monthly diffusion index built from a survey of purchasing managers at roughly 300 industrial companies. Readings above 50 signal expansion in the factory sector while readings below 50 signal contraction. The headline is assembled from five equally weighted sub-indices — new orders, production, employment, supplier deliveries and inventories.

Why it matters to traders

Manufacturing is highly cyclical, so the ISM is one of the earliest and most reliable reads on the health of the US economy. A surprise relative to forecast moves the dollar and Treasury yields immediately because traders use it to recalibrate the odds of the next Fed move. The new-orders and prices-paid sub-indices are watched closely for forward-looking demand and inflation signals.

Trade the reaction across the major currency pairs, world indices and commodities, follow the story in market news, and record your setup in the FXMARE trading journal.