US manufacturing indicators disappointed - ANZ

Research Team at ANZ, notes that yesterday the Chicago PMI dipped below 50 in May at 49.3 (mkt: 50.5).

Key Quotes

“The production index slumped to its lowest level since February, while new orders registered its weakest performance since December. The employment index also posted a sub- 50 reading. The Dallas Fed manufacturing outlook also disappointed at -20.8 (mkt: -8.0). The weakness was broad-based with production down to -13.1 (last: +5.8) and new orders slumping to -14.9 (last: +6.2).

US personal spending spiked in April, up 1.0% (mkt: 0.7%), from 0.1% previously. Personal income was up 0.4%, matching market estimates. The PCE deflator also matched expectations at 1.1% y/y and core at 1.6%. The increase in spending was the most since August 2009 and although not likely sustainable, Q2 GDP is starting on firmer footing. The data also likely signals that the tightening of the labour market and rising wages are having positive impacts on spending, supportive of the next rate hike in June/July.

US S&P/Case-Shiller home price index growth came in firmer than expected in March, up 5.4% y/y (mkt: 5.2%). The gains in March were driven in part by limited inventory, and follow more timely strength in existing and new homes sales in April.”