April 22, 2022 14:02 GMT
- The overriding takeaway from the S&P Global PMI was one of inflation weighing on growth prospects.
- Manufacturing activity surprisingly firmed but the much more heavily weighed service measure fell more than 3pts to 54.7, the lowest since 51.2 in Jan as Omicron wave fears mounted.
- Inflationary pressures were clear: there was “a series-record rise in input costs across the private sector as raw materials, fuel, transportation and wage bills ticked higher” and “In an effort to pass through higher cost burdens to clients, businesses signalled the steepest rise in output charges on record.”
- The market reaction has been on the softer growth implications. Tsys find a bid with the front-end bouncing off session low and down 3bps, Fed hike expectations dip 1bp but are still up strongly on the day with 251bps priced to year-end, whilst BBDXY sees a marginal trimming of earlier gains.