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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
DATA REACT
Sell-side analysts highlight the continued supply-side constraints evident in today's May ISM Manufacturing report, and the potential implications this may have for inflation.
- Wells Fargo calls the changes in the ISM subcomponents "a Tantalean punishment for manufacturers", with "the story that emerges ... one of a manufacturing sector that could be growing much faster were it not for supply-side growing pains".
- They note "the ongoing struggles for the supply-side of the economy to meet demand has left price pressures growing at a breakneck pace....manufacturers may very well be able to pass costs on given the strong demand backdrop." As further evidence, they highlight that Fed regional PMIs show rising price pressures for "prices received" (see chart below).
- ING observes the highest supplier delivery times since 1974 among other factors suggesting that while there is no problem with US demand, there are plenty of supply chain strains holding back output. "The problems within the auto industry are well documented, but it is clear that getting hold of both components and workers is a growing challenge sector-wide." As they put it, "inflation is likely to be more persistent than the Fed acknowledges right now".
Source: Wells Fargo citing ISM, Federal Reserve
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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