The S&P Global US Manufacturing PMI slipped to 49.4 in December 2024, compared to 49.7 in November.
This was revised upward from an initial estimate of 48.3 but remained below market expectations of 49.8. The reading represented the sixth straight month of contraction in US manufacturing, underscoring a contrast with the relatively stronger services sector.
Factory output declined at the sharpest rate in 18 months, driven by falling new orders. This drop was linked to client hesitation over new projects amid uncertainties surrounding anticipated policy changes under Donald Trump’s incoming administration. New export orders also weakened due to reduced demand from Europe.
Despite these challenges, factories increased hiring, though firms scaled back purchasing activity in response to expected lower demand. On the inflation side, input cost pressures rose significantly, contributing to notable increases in output prices.
Source: SP Global
Dollar strength remained a key pressure across major currencies and precious metals as Federal Reserve officials reinforced expectations for further monetary tightening.
Renewed expectations for further Federal Reserve tightening kept the dollar supported as policymakers continued to warn about persistent inflation risks.
Fed, BOJ Hikes Lift Dollar as Oil Falls (21 – 25 September)Global markets entered the week balancing tighter monetary policy against signs of easing Middle East energy risks. The Federal Reserve remains the main macro driver after raising rates to 3.75%–4.00%, its first hike since 2023, and signaling that another increase remains possible this year. The Dollar Index advanced to 100.4, while Treasury yields remained elevated. The Bank of Japan also tightened policy, raising rates to 1.25%, although dissent within the board suggested that future increases could come at a slower pace.
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