The ISM Manufacturing PMI rose to 55.5% in October, surpassing the consensus forecast of 54.5% and marking the tenth consecutive month of expansion for the sector. The headline index increased by 1 percentage point from September’s reading, underpinned by a surge in the Production Index to 59%—its highest level since November 2021. New orders also showed sustained momentum, edging up to 55.5%.
While the sector remains robust, inflationary signals were mixed as the Prices Index retreated to 75.2% from September’s 77.9%. Employment growth also slowed slightly to 52.4% during the month.
Immediate market reaction saw U.S. Treasury yields move in a "twist flattening" pattern as investors balanced the strong manufacturing data against geopolitical risks and upcoming midterm elections. The U.S. dollar maintained a bullish tone, with the USD/JPY pair testing the 158 level following the release.